*EPF101 04/03/00
Transcript: Excerpts from Clinton Speech on New Economy Challenges
(As people understand China trade deal, they will support it) (2690)

While acknowledging in an April 3 speech that U.S. lawmakers may have concerns about China's record regarding labor rights and protecting the environment, President Clinton said "none of that is an argument for opposing China's entry into the WTO (World Trade Organization), and even more specifically, for opposing the Congress in granting permanent Normal Trade Relations (NTR) to China."

The President spoke at a conference of the Democratic Leadership Council in San Jose, California, where he urged lawmakers to grant permanent NTR status to China so that American businesses could benefit from the trade agreement reached last year between the United States and Beijing on the terms of that country's accession to the WTO.

Both the Senate and House of Representatives must vote to end application of Title IV of the Trade Act of 1974 to China, so that China will have the same NTR status as other U.S. trading partners that are members of the WTO.

The vote in Congress, Clinton said, "is on an agreement that lowers no American trade barriers, lowers no American tariffs, grants no greater access to China to any part of the American economy...."

On the other hand, Clinton said, "Chinese tariffs will fall by more than half over five years in every sector -- from telecommunications to automobiles, to agriculture."

American companies, for the first time, will be able to sell and distribute products in China "without having to transfer technological know-how to Chinese firms, or put manufacturing facilities overseas," Clinton said.

"For the first time, China will agree to play by the same trading rules that we follow," Clinton added.

Addressing the concerns of PNTR opponents who feel the Beijing regime is a one-party communist state that persecutes religious expression and commits human rights abuses, Clinton conceded that is the case, but added that the best way to change China is by bringing the Beijing regime into the world trading system, and not by excluding it.

"There is no denying, as some of the opponents of this agreement assert, that China is a one-party state, that it does not tolerate opposition, that it still denies its citizens fundamental rights of free speech and religious expression that we hold very dear," Clinton said.

"The question is, what is the most intelligent thing we can do to increase the chances that China will become more open, more democratic, and a constructive member of the global community in the 21st century," he said. "I think the answer is to allow them in and to let liberty spread from within."

"I think the more the American people learn about our agreement with China, the more they will support it. I think the more elected representatives learn about it, the more they'll get behind it," Clinton said.

Following are excerpts from the official White House transcript of the speech:

(begin transcript)

THE WHITE HOUSE

Office of the Press Secretary

(San Jose, California)

April 3, 2000

REMARKS BY THE PRESIDENT

TO THE DEMOCRATIC LEADERSHIP COUNCIL CONFERENCE

ON "NEW CHALLENGES OF THE NEW ECONOMY"

Tech Museum of Innovation

San Jose, California

THE PRESIDENT: ... Now, let me talk briefly about the China issue and trade.

We've had over 270 trade agreements in the last seven years. They have clearly boosted economic growth. Until the Asian financial crisis, 30 percent of our growth was attributed to the expansion of exports. But they have, as Zoe Lofgren said so eloquently in her remarks, the trade issue has become symbolic of people's general unease about globalization and their sense that the world is not about economics alone, it's about the fair distribution of gain, it's also about the preservation of other values, like our values opposing child labor or abusive labor conditions or our desire to see the standing of the entire global economy improve. And somehow, these trade agreements have become a lightening rod for everybody's dissatisfaction with everything, although the evidence is, the more we trade with countries and the more wealth they get, the more likely they are to elevate labor standards and improve the environment.

And I have really tried to be out there on the forefront of arguing for global efforts to integrate an approach to a global society that included labor and the environment along with economic agreements. Now, having said that, none of that is an argument for opposing China's entry into the WTO, and even more specifically, for opposing the Congress in granting permanent normal trade relations to China.

I think it's very important that everyone understand exactly what this is. I still talk to members who are a little bit, I think, uncertain about exactly what this legislation does. We reached an agreement with China for the terms of their entry into the WTO. When China concludes similar agreements with other countries, it will join the WTO. But for us to benefit from the agreement that we negotiated, China must first be granted permanent normal trading status by Congress. It's the same arrangement we have with other countries in the WTO.

Now, there is a lot of controversy in Congress about this vote. And I've heard all the arguments. But I think that, I have to tell you first of all just on the trade terms, in the entire history of trade agreements, I don't believe there's ever been one this weighted in our favor, for one simple reason. This is not really a trade agreement, it's a membership agreement. It's very important that you understand. This is a membership agreement. This is China saying we don't have a modern, open economy, we'd like to be in this modern, open trading system. If you will let us in, here are the changes we are prepared to make. That's what this is about.

Therefore, this vote by Congress is on an agreement that lowers no American trade barriers, lowers no American tariffs, grants no greater access to China to any part of the American economy -- nothing, zip, zilch, nada, zero. (Laughter.) On the other hand, Chinese tariffs will fall by more than half over five years in every sector -- from telecommunications to automobiles, to agriculture.

For the first time, American companies will be able to sell and distribute products in China without having to transfer technological know-how to Chinese firms, or put manufacturing facilities overseas. For the first time, China will agree to play by the same trading rules that we follow.

Accordingly, the narrow, or broad, economic consequences are 100-0 in our favor. But I believe the moral and national security arguments also favor this decision. There is no denying, as some of the opponents of this agreement assert, that China is a one-party state, that it does not tolerate opposition, that it still denies its citizens fundamental rights of free speech and religious expression that we hold very dear. That is not the question.

The question is, what is the most intelligent thing we can do to increase the chances that China will become more open, more democratic, and a constructive member of the global community in the 21st century. I think the answer is to allow them in and to let liberty spread from within.

Under this agreement, China will slash the tariffs that protect its inefficient state-run industries, industries which the communist party has long used to exercise day to day control over people's lives. China's leaders feel this step is essential to maintaining their competitiveness. And they're not foolish people. They know it may unleash forces that the leaders, themselves, cannot control. The late Chief Justice Earl Warren, from California -- a former governor of California -- said that liberty is the most contagious force in the world.

In the new century, liberty will spread, in part, by cell phone and cable modem. In the past year, the number of Internet addresses in China in one year has gone from 2 million to 9 million. This year the number is expected to grow to over 20 million. There are 1.2 billion people in China. When China joins the WTO, by 2005, it will eliminate tariffs on information technology products, making the tools of communication even cheaper, better, more widely available. American telecommunications firms and service providers are perfectly poised to fill this enormous market.

We know how much the Internet has changed America, and we're already an open society. Imagine how much it will change China. Of course, there's no question China has been trying to crack down on the Internet -- good luck. (Laughter and applause.) That's like that EDS ad. You remember that ad where these cowboys are trying to herd cats? (Laughter.) That's the best ad I saw on television last year. (Laughter.)

The very fact that the Chinese government is trying to herd these cats shows you how real the changes are and how much they threaten the old order. They are proof that we should keep going in this direction, not that we should hold back.

Now, of course, I recognize that bringing China into the WTO is not a human rights policy in and of itself, and we have to continue to push China in every way we can to improve and observe human rights. We're pressing for a resolution at the U.N. to condemn human rights abuses in China that we object to. We urge other nations to join us.

But I think it is quite significant that the people with the greatest interest in seeing China change agree with our efforts to bring China into the world trading system. There's something almost patronizing in the opposition of some elements in the United States to China coming into the WTO, when the people they say they're trying to help believe they'll be helped if China does come into the WTO. The citizens of Taiwan, despite all their tensions with Beijing, by and large want to see China in the WTO. And so does Taiwan's newly elected leader. It's a very important point. So does Taiwan's newly elected leader.

Most evangelical Christians who have missions in China want China in the WTO. Most human rights organizations want China in the WTO. I think the more the American people learn about our agreement with China, the more they will support it. I think the more elected representatives learn about it, the more they'll get behind it. Support is building based on the evidence.

And we have signs of that today. You heard the Governor mention the letter he's signing. Now we have over 40 of our nation's governors, Republicans and Democrats, in favor of granting China permanent normal trading status. And they say it will create tremendous opportunities for their companies and farmers and more high-wage American workers. In addition to Governor Davis, I want to thank Governor Locke of Washington and Governor Schafer of North Dakota for their efforts.

We've got more members of Congress coming on board, and I thank Zoe Lofgren for the brave announcement she made today. And today, I'm pleased to announce that the CEOs of over 200 high-tech firms from across our country have also signed a letter urging members of Congress to support this legislation. (Applause.)

In their letter, the CEOs say, this vote is an absolute priority for high-tech companies, and the most critical vote Congress will take on high technology this year. Now, here's the clincher I want to explain that I think a lot of people don't understand. If we don't vote for permanent normal trading status, and China makes its agreement with Europe, they still get in the WTO. The only difference is Europe and Japan get the benefits of the deal that we negotiated.

Opposition to this -- it reminds me of that old Cajun joke I learned when I was a boy -- I shouldn't be telling this story, but I'm going to. (Laughter.) But, I mean, really. This guy, Pierre, comes up to his friend, Jean, and he says, "Jean, why do you have dynamite in your suit pocket? Usually you got those big expensive cigars." He said, "Yeah, but every time I do that, Raymond, he comes up to me and he says, hey, Jean, and he hits me in the pocket. He destroys my cigars." He said, "Now you got dynamite? When you do it now you will kill yourself." He said, "I know, but I blow his hand off." (Laughter.) You think about it.

We made this deal, and now we say, we take it back, we don't want it, we're going to give it to you. We made this incredible agreement, we've been working on all these problems with China for years, we can't get in the markets, we can't distribute our automobiles, we can't distribute our auto parts, we've got to have manufacturing and technology transfer. It's all gone, and now we say, we don't want any of that, we're going to give it to the Europeans and the Japanese. Let's see if they can do a good job with the deal we negotiated.

It's very important that you understand this. The main consequence of this will be to hurt America economically and to dramatically strain our relations with China at a time when we need to maintain a positive ability to impact their conduct -- to reduce strains along the Taiwan Straits, and to get the leaders in that country to imagine the greatness of their country in future terms, not yesterday's terms. This is a big deal. (Applause.)

It isn't like we can stop the modernization, but we can turn it into a very dark direction. Or we can run a much bigger risk. You all think about that story I told you. How many times have you done that in your life?

Now that I am in the last year of my presidency and I'm not running for anything, I can tell you, perhaps with some greater credibility, that I think we in America generally tend to overestimate the influence we have by stiffing people, and we generally tend to under-estimate the influence we have by reaching out a hand of cooperation. Not in a naive way, not in a blind way, never abandoning our values. But just -- what was this DLC all about in the beginning? We were sick of these partisan, rhetorical bombshells that dominated Washington politics. We thought there had to be a way to get underneath and beyond that, to join people together in constructive endeavors. And lo and behold, it worked. And it's not different in the rest of the world.

Now, all I can tell you is I believe that if we do this, 20 years from now we will wonder why we ever had a serious debate about it. If we don't do it, 20 years from now we'll still be kicking ourselves for being so dumb. That's what I really believe. And there is no point in my being delicate about this -- I think this is a big deal. And our country and my successors in office, and their ability to do the right thing by you and by our values, will turn in no small measure on how we vote on this. So I realize that in the crowd I'm preaching to the saved -- (laughter) -- but if you want America's economy to continue to grow, and if you want your country to continue to be a force for peace and freedom and prosperity and to have an influence on people, to get them to give up their irrational attachment to the animosities of yesterday, we have to be willing to shoulder our burden for the future. This is part of it, and ironically, we will be one of the greatest beneficiaries by doing what is right for Chin a and for the rest of the world.

Thank you very much. (Applause.)

(end transcript)

(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: usinfo.state.gov)

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