*EPF204 05/02/00
Text: Rep. Hoyer May 2 Remarks on U.S.-China Trade Relations
(Hoyer to support Permanent Normal Trade Relations status) (3260)

Despite "grave reservations" about China's commitment to improving human rights, Representative Steny Hoyer (Democrat of Maryland) says he will support Permanent Normal Trade Relations (PNTR) for China.

Hoyer, the ranking member of the Commission on Security and Cooperation in Europe, made the announcement during a May 2 speech at Johns Hopkins University's School of Advanced International Studies.

He said that the yearly congressional debate over renewing trade relations with China has failed to influence positive change in that country.

"Moreover, our vital economic, strategic and national security interests were not at stake in these annual votes on extending NTR in the same way that they are now," he said.

"This confluence of our national economic and security interests when coupled with the ineffectiveness of our annual votes has convinced me that PNTR is in the best interests of our nation, global stability, and the nascent democracy, labor and human rights movements in China," he said.

Hoyer said he disagrees with the view that passing PNTR surrenders America's only leverage on the issue of human rights.

"Engagement does not constitute endorsement of China's record on human rights," he said. "And while I strongly supported the isolation of South Africa in opposition to apartheid, I believe that approach is neither possible nor advisable with respect to China."

"China will become a member of the WTO (World Trade Organization), regardless of whether we pass this legislation or not," Hoyer said. "However, if we reject PNTR, other countries -- which are negotiating their own bilateral agreements with China -- will step into the vacuum and reap the rewards that would have been available to American companies and workers."

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

(begin text)

PERMANENT NORMAL TRADE RELATIONS FOR CHINA: A 21ST CENTURY OPPORTUNITY

Remarks of the Honorable Steny H. Hoyer
Johns Hopkins University
The Paul H. Nitze School of Advanced International Studies
Washington, D.C.
May 2, 2000

Introductory Remarks

Good afternoon and thank you for inviting me here today.

I want to especially thank Dean Paul Wolfowitz for extending this kind invitation to discuss the issue of permanent normal trade relations with the People's Republic of China. I regret that Dean Wolfowitz could not be with us today, and understand that he had to make a last-minute trip.

But I'd like to thank Steve Szabo for that kind introduction, and also to recognize Mike Lampton, the director of your China Studies Department and a China expert, and my good friend, Steve Muller, the president emeritus of John Hopkins University.

It goes without saying that the vitality and importance of this institution are well recognized in the foreign and public policy communities. That's why President Clinton, Ambassador Barshefsky, former Congressman Hamilton and others have chosen to speak here on this important issue.

I also want to extend a special thanks to the students who have come here today. I understand that you're taking your final exams, and greatly appreciate that you have taken time from your busy schedules.

A Pivotal Moment in Sino-American Relations

In three weeks, the U.S. House of Representatives will cast a vote that could reverberate throughout the 21st Century. The historic importance of our vote on legislation that would grant the People's Republic of China permanent normal trade relations cannot be overstated.

In the decades to come, I believe we will look upon this vote as a pivotal moment in Sino-American relations -- a moment that builds on President Nixon's breakthrough visit to the People's Republic in February 1972 and on President Carter's decision to normalize relations between our two countries seven years later.

Furthermore, I believe that China's accession to the World Trade Organization will be a seminal moment in the Middle Kingdom's history -- a history more notable for its isolation and insecurity than its willingness to engage the world beyond the Great Wall.

In applying for WTO membership, China has recognized the political and economic imperative of the 21st century: the global economy and interdependence cannot be ignored. For the first time, it has agreed to embrace the global trading system based on the rule of law.

This is a momentous step -- for China, the United States and other nations of the world.

A few years before President Nixon's historic visit to China and the resulting Shanghai Communiqu? he wrote: "[W]e simply cannot afford to leave China forever outside the family of nations, there to nurture its fantasies, cherish its hates, and threaten its neighbors."

In seeking inclusion within the family of nations, China acknowledges that which it long ignored: isolation imperils its economic development.

We must recognize that, despite our deep misgivings about the communist regime in Beijing and its egregious violations of human rights, we cannot ignore or attempt to isolate the most populous nation on earth.

Rather, as the most powerful nation on earth, we have a responsibility to engage China and use our best efforts to move it toward democratic reform, market economics, the rule of law, and respect for basic human rights.

We cannot control the decisions China makes regarding its future, but we can have an influence on them.

Democratic Unity and Human Rights

Many people believe that our vote on PNTR exposes division within the Democratic Party. This is true only in the most obvious sense: support for or opposition to PNTR.

In a larger sense, however, Democrats are united in their commitment to basic human rights and fundamental freedoms for China's 1.3 billion citizens and all other citizens of the world.

Democrats also are united in our commitment to global trade policies that strengthen America's position in the world, raise the standard of living for working men and women at home and abroad, and protect the one environment that we share and will leave for our progeny. International engagement and global trade is our rich tradition -- from FDR's conception of a global trading system to Harry Truman's development of the institutions and policies of the General Agreement on Tariffs and Trade.

More recently, President Clinton recognized that the United States can address the problems of the new century "if we shoulder our responsibility to lead a responsible system of worldwide trade."

When Democrats have disagreed, our differences have not been over the ends that American policy seeks to achieve. Rather, our differences have been over the best means through which to achieve them.

As the Ranking Member and former Chairman of the Commission on Security and Cooperation in Europe (also known as the Helsinki Commission), I have long had a deep and abiding commitment to human rights on the European continent and every other part of the world. In fact, China's human rights violations have been my principal motivation for voting against normalized trade relations in the past.

Two weeks ago, my good friend and choice for Speaker, Dick Gephardt, announced his opposition to PNTR. I have the deepest respect for the Minority Leader, and my friends and allies in the labor, environmental and human rights groups that oppose granting PNTR.

I have fought alongside them in many legislative battles, and I continue to share their grave concern over Beijing's policies on human rights, labor standards and the environment.

But the Minority Leader correctly pointed out that reasonable minds can disagree. And, on this issue, we do.

When previously we voted on MFN or NTR, China was not required to make concessions to earn its trading privileges. WTO accession will change that.

I believe that our annual votes on NTR, at best, have had a minimal effect in mitigating repression and human rights abuses in China.

The slaughter of an estimated 5,000 pro-democracy protesters in Tiananmen Square in June 1989 and the injuries suffered by 10,000 others there did not prompt us to withdraw trading privileges -- even though in my view it should have.

Nor have we failed to extend NTR status due to China's continued repression of dissent, its interference with freedom of religion, association and the press, its counterproductive saber rattling toward Taiwan, or, more recently, its crackdown on the Falun Gong spiritual movement.

In fairness, the people of China -- by some accounts -- are somewhat better off today than a few years ago. The government has extended some basic rights to citizens: starting a business, choosing a job or watching a foreign movie.

Over the last 20 years, economic reforms have lifted more than 200 million Chinese citizens out of absolute poverty.

Still, progress on basic human rights has been inexcusably slow. China's record in this area is not acceptable in a civilized world.

Nevertheless, despite my grave reservations about the communist government's commitment to improving human rights and expanding freedoms, the fact remains: There is little, if any, evidence that our annual votes have produced positive change within China.

Moreover, our vital economic, strategic and national security interests were not at stake in these annual votes on extending NTR in the same way that they are now.

This confluence of our national economic and security interests when coupled with the ineffectiveness of our annual votes has convinced me that PNTR is in the best interests of our nation, global stability, and the nascent democracy, labor and human rights movements in China.

Thus, today I am announcing that I will support granting permanent normal trade relations to the People's Republic of China.

This new century and the new economy marked by globalization and increased interdependence require a new approach. Our annual votes have not achieved our ends. PNTR presents a 21st Century opportunity to do so.

Our Economic Interests

The economic benefits that the United States may reap if we pass this legislation are well known. I do not intend to recount them all here.

Suffice it to say that Ambassador Barshefsky has done a good job in negotiating the bilateral trade deal that was finalized last November.

As President Clinton stated here at SAIS on March 8: "Economically, this agreement is the equivalent of a one-way street."

In my view, that "one-way street" will run in favor of the United States, where previously it has been solely in China's favor.

Among other things, WTO accession would require China to open its markets to our products and services, including professional services providing legal, consulting, accounting and environmental expertise.

Under our bilateral trade agreement, China also has agreed to slash tariffs on priority agricultural, industrial, and telecommunications products. Further, China will permit American companies to sell and distribute our products in China without having to relocate there, or sell through the Chinese government or transfer valuable technology.

Our agreement provides safeguards against import surges and forced technology transfers, and includes strong anti-dumping measures. It also will enforce China's trade commitments through the WTO's multilateral enforcement mechanism.

Passing PNTR is necessary to realize the benefits of this bargain.

China will become a member of the WTO, regardless of whether we pass this legislation or not. However, if we reject PNTR, other countries -- which are negotiating their own bilateral agreements with China -- will step into the vacuum and reap the rewards that would have been available to American companies and workers.

Let me be perfectly honest. Despite the seeming windfall this trade agreement provides -- and these benefits will be neither immediate nor a surety -- I do not believe that potential economic gain alone justifies our granting PNTR to China.

President Kennedy once said, "We stand for freedom. That is our conviction for ourselves; that is our only commitment to others."

Today, my commitment would be much different were this decision based solely on our economic interests. But it is not.

Our Strategic and National Security Interests

While our national economic interests are entwined with our national security interests, the vote on PNTR undeniably affects core American strategic and national security interests. They must weigh in our considerations.

I strongly believe that the United States has a vital national security interest in China's stability. The lesson of post-World War I Germany leads me to conclude that such stability is enhanced by China's inclusion in the world community and diminished by its isolation.

Second, the United States has vital national security interests in Asia. As Sandy Berger, the President's National Security Advisor, has stated, we are a Pacific nation. We fought three wars in Asia in the last century. Our future is inextricably linked to this region. Asian countries see China's economic development and political integration, and stable U.S.-China relations as key to regional security. If we reject PNTR, the security of these nations is lessened.

I find it persuasive that China's accession to the WTO and PNTR are not only supported by the President, more than 40 Governors and so many others in this country, but also throughout Asia.

The list of supporters includes Japan, South Korea and the members of the Association of Southeast Asian Nations (ASEAN), which includes Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand.

In addition, Taiwan's newly elected president, Chen Shui-bian, has stated: "We would welcome the normalization of U.S.-China trade relations, just like we hope the cross-strait relations also can be normalized."

Others in the region see China's accession to the WTO as a major step.

In a letter to President Clinton, Martin Lee, the Chairman of the Democratic Party of Hong Kong, wrote: "The participation of China in the WTO would not only have economic and political benefits, but would serve to bolster those in China who understand that the country must embrace the rule of law."

And Chinese dissident Ren Wanding, a leader of the 1978 Democracy Wall Movement, says WTO accession "can be a new beginning."

This leads to my third point: the United States has a vital national security interest in the peaceful resolution of differences between Taiwan and the PRC. We reject the use of force or threat of the use of force to resolve differences, and support a direct dialogue. China's further integration into the family of nations can only support this interest.

Fourth, the United States has a vital national security interest in engaging China on issues such as the proliferation of weapons of mass destruction and dangerous technologies, and global climate change. PNTR will facilitate dialogue on these issues, and American influence on them.

Finally, I believe that rejection of PNTR will be viewed by the Chinese as a turn from cooperation to confrontation. While China is neither a close friend nor an ally, it manifestly is not in our interests to strengthen the hand of those within the Chinese government who oppose cooperation with the United States and the world community.

As President Clinton points out, these are the same hardliners who are most threatened by our alliances with Japan and South Korea; who want to sell dangerous military technologies, and who believe confrontation -- rather than dialogue -- is the best approach with Taiwan.

A 21st Century Opportunity

Finally, let me say that I disagree with the view that passing PNTR surrenders our only leverage on the issue of human rights. In fact, as I have said, I think the annual NTR review has had little impact on China's human rights performance.

Engagement does not constitute endorsement of China's record on human rights. And while I strongly supported the isolation of South Africa in opposition to apartheid, I believe that approach is neither possible nor advisable with respect to China.

We must continue to strongly press China to respect basic human rights through resolutions before the U.N. Human Rights Commission and other international fora. We also must press China through the other tools we possess, such as enforcing our laws that ban imports produced by prison labor.

In addition, the proposal of my colleague, Sandy Levin of Michigan, to establish a formal congressional-executive commission on China modeled on the Helsinki Commission is an important step.

The Levin proposal would institutionalize mechanisms for maintaining pressure on China to improve its record on human rights, labor standards and other commitments. I believe it should be adopted irrespective of the outcome of the vote on PNTR.

I know from my experience on the Helsinki Commission that such a panel can have a significant, positive effect. It is not an empty gesture.

Indeed, I believe that a commission similar to the Commission on Security and Cooperation in Europe -- which holds hearings throughout the year -- will have a vastly greater impact than an annual review of China's NTR status.

In addition to creating a commission, Congressman Levin also has proposed several other very good ideas for shaping China's course. These include putting into U.S. law the anti-import surge safeguard that China agreed to last year, pursuing institutional reforms of the WTO to re-enforce openness and the rule of law, and strengthening our monitoring and enforcement of China's trade agreement obligations by committing additional resources to the Department of Commerce and the Office of the U.S. Trade Representative.

I certainly support these objectives.

Likewise, I am supportive of the efforts of my good friend, Congressman Ben Cardin of Maryland, who is working on a proposal to strengthen anti-surge safeguards and relief under Section 201 of the Trade Act of 1974.

Engagement through PNTR represents neither acceptance nor accommodation of abuses of human rights, but rather a new approach for the new century. Our policy aims have not changed; the means we use to achieve them have.

In my view, China's accession to the WTO will deepen market reforms, empowering Chinese leaders who want to accelerate the move toward economic freedom. Our agreement will expose China to global competition, pressuring it to privatize state-owned industries and expand the role of the markets.

WTO accession also will accelerate the removal of government from citizens' lives. Our agreement will open China's telecommunications market, including Internet and satellite services. Thus, over time the Chinese people will be exposed to information and ideas that Beijing cannot hope to contain.

Further, WTO accession will strengthen the rule of law in China because it obligates the Chinese government to publish laws and regulations, and subjects some decisions to review by an international tribunal. This will advance our interest in bringing China into agreements and institutions that will strengthen its stake in peace and stability.

We of course must be clear-eyed realists in our relationship with China. Change will be gradual. There undoubtedly will be retreats. And if the progress we hope for does not happen, we will have to reassess our position. But we must recognize that we have come a long way since the People's Republic of China was proclaimed in October 1949 under Mao Zedong. We have come a long way since President Nixon visited China and met with Premier Zhou Enlai in 1972.

We must not be adverse to new ideas, especially when past approaches have proven inadequate, our core national interests are at stake, and we have an opportunity to achieve our aims.

PNTR is a 21st Century opportunity -- an opportunity to move our relationship forward and to move China toward political openness, market economics, the rule of law and respect for basic human rights.

If we fail to seize it, this loss will be felt here at home, as well as in China and around the world for years to come.

Thank you.

(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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