The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“PERMANENT NORMAL TRADING RELATIONS FOR CHINA” mentioning the U.S. Dept of Agriculture was published in the Senate section on pages S8812-S8814 on Sept. 20, 2000.
The publication is reproduced in full below:
PERMANENT NORMAL TRADING RELATIONS FOR CHINA
Mr. ABRAHAM. Mr. President, I rise today to discuss the vote I cast yesterday in support of H.R. 4444, the bill extending permanent normal trading relations to the Peoples' Republic of China.
While the vote we cast yesterday was to grant China PNTR, it cannot be viewed separate from the question of China's accession to the WTO. In our negotiations with the Chinese over their entry in the WTO, we agreed to end the annual exercise of renewing NTR and to extend NTR to China permanently. In fact, if we do not grant China PNTR we will be the ones in violation of the WTO's rules when China is ultimately granted entry into the WTO. And, as a result, we will lose access to their markets and the beneficiaries of this will be our trade competitors in Europe, Asia, and South America. Most importantly, we have gained some very important trade concessions in our negotiations with the Chinese over their entry into the WTO, and we stand to gain even greater trade concessions from them once they join the WTO and become subject to its rules and dispute resolution procedures.
By extending PNTR and allowing China entry into the WTO, the U.S. can expect to increase exports to China by an estimated $13.9 billion within the first five years. And according to the U.S. Department of Agriculture, American farmers will account for $2.2 billion of that increase in exports to China. If our economy is to continue to grow and we are to continue to create more good-paying, skilled jobs so that unemployment remains low and Americans can take home more income, we must expand our economic opportunities. The best way to accomplish that is to find new markets for our products. And the most lucrative new market that exists is China.
As our colleague from Texas, Senator Phil Gramm, pointed out in a
``Dear Colleague'' letter he circulated earlier this week, things in China are changing significantly, if perhaps not as quickly or as comprehensively as we wish. Senator Gramm quoted a report on China recently issued by the Federal Reserve Bank of Dallas, in which the observation is made: ``Beijing's billboards no longer spout ideology. They advertise consumer products like Internet service, cell phones, and credit cards.'' There can be little doubt that China is changing. The task left to us to decide is how best to effectuate positive change there.
My primary concern, in evaluating how to vote on PNTR and China's accession to the WTO has always been: ``What is in the best interests of Michigan's workers and businesses?''
China was Michigan's 15th largest export market in 1998. That rank has almost certainly risen since then. Michigan's exports to China grew by 25 percent during the 5 years between 1993 and 1998, increasing from
$211 million to $264 million. Businesses in the Detroit area accounted for $180 million of those exports in 1998, an 11 percent increase over its 1993 figure. Other areas of Michigan are seeing truly phenomenal growth in trade with China. Exports to China from businesses located in the Flint and Lansing areas grew by more than 84 percent from 1993 to 1998. And exports from Kalamazoo and Battle Creek businesses to China grew by an astounding 353 percent during that same period, according to the U.S. International Trade Administration.
The growth in China trade outside of Detroit is due to the surprisingly high number of small and medium-sized businesses in Michigan that are exporting to China. According to the Commerce Department, more than 60 percent of the Michigan firms exporting to China in 1997 were either small or medium-sized companies. Of the 149 small and medium-sized Michigan businesses exporting to Michigan in 1997, as substantial majority of these were small businesses with fewer than 100 employees. This trend extends beyond Michigan as well. Nationwide, not only did small and medium-sized businesses in 1997 comprise 35 percent of all U.S. merchandise exports to China--up from 28 percent in 1992--but this 35 percent share of the Chinese market was higher than the share small and medium-sized businesses had of overall U.S. merchandise exports that year--31 percent.
While Michigan's manufacturing sector certainly stands to benefit from passing PNTR and China's accession to the WTO, we must not overlook the tremendous benefits that Michigan farmers also stand to gain from these agreements. Agriculture is Michigan's second largest industry, and exporting is a vital component of the state's agricultural business. Michigan agricultural exports totaled almost $1 billion in 1998, but that figure was down almost $100 million from two years earlier. With increased competition in agriculture at home and abroad from the European Community and major S. American exporters such as Chile, opening up a massive new market such as China would be of tremendous benefit to a state like Michigan that relies so heavily on agriculture production and export.
The agreement the U.S. negotiated with China, which includes PNTR, contains significant trade concessions by the Chinese in four areas critical to Michigan agriculture. Michigan exported $240 million worth of soybeans and soybean products in 1998, and China is the world's largest growth market for soybeans. China has agreed to lower tariff rates on soybeans to 3 percent with no quota limits. Michigan is also a large feed grains producer, exporting $163 million worth of feed grains and products in 1998. China has agreed to lower their quota to a nominal 1 percent within an agreed upon import quota schedule. However, that quota grows at a tremendous rate, starting at 4.5 million metric tons and growing to 7.5 million metric tons by 2004. By comparison, China imported less than 250,000 metric tons of corn from all countries in 1998. The circumstances are much the same for two other very important Michigan agriculture products--vegetables and fruit. On vegetables, China's tariff rates are scheduled to drop anywhere from 20 to 60 percent by 2004. With respect to fresh and processed deciduous fruit, China has committed to tariff reductions of up to 75 percent. To a state like Michigan, which is known for its cherries, apples, pears, and peaches, this is a significant breakthrough for our fruit growers.
Of course, Mr. President, this is not the end of the story. While many of these tariffs will be substantially reduced and quotas are lifted or expanded considerably, tariffs and quotas will still remain on many U.S. goods--as they in fact will continue to exist on certain goods coming from China into the United States. But once China is a member of the WTO, the U.S. will continue to push to have Chinese trade barriers reduced even further and eliminated altogether.
A critical element of this debate that too often gets overlooked is the degree to which our membership in the WTO helps us eliminate unfair trading practices amongst our trading partners. The WTO provides a forum to which we can take trade disputes with our trading partners involving unfair trading practices by them. One of the primary functions of the WTO is to provide procedures to settle trade disputes promptly, eliminating a significant deficiency of the previous GATT system in which the process often dragged out indefinitely. The WTO procedures are inherently more fair and more predictable--and that is to our benefit as the world's largest economy and as the world's foremost promoter of free and fair trade.
The United States has filed more complaints to the WTO against other countries--49 of them as of April of this year--than any other WTO member country. The U.S. has also prevailed in 23 of the 25 complaints acted upon up to that time--clear evidence that the WTO is of tremendous assistance to us in getting other countries to stop their unfair trading practices. This is also why we can be confident that once China becomes a member of the WTO that we will be able to further reduce the remaining trade impediments they have against our goods and that we will be able to ensure that they live up to the commitments they have already made to us in exchange for PNTR and our support for them joining the WTO.
While I have supported annual renewal of NTR each year I have been in the Senate, I have also been a severe critic of many of China's policies and actions and their human rights record. In 1997, I introduced the China Policy Act, in which I attempted to outline a new paradigm for dealing with the Chinese. Specifically, I felt it was unwise for us to use trade continually as our weapon of first resort each time an issue arose between our two countries, whether it be nuclear non-proliferation and missile sales to rogue nations, religious persecution, repression in Tibet, forced abortion, or threatening gestures towards Taiwan.
I feel it unfair to American companies and farmers doing business in China to make them constantly bear the brunt of our efforts to get the Chinese to modify their behavior. I am also concerned about pursuing such a strategy when it would likely result in U.S. companies and farmers losing market share and market access in China to our trade competitors in Europe, Asia, and South America. The China Policy Act legislation I introduced in 1997 essentially said, ``Let us reserve using trade as a weapon only for those occasions when our dispute with China is trade related.''
My China Policy Act took a very tough stand on what I believe was unacceptable behavior by the Chinese in the area of missile sales and nuclear proliferation. In response to China's sale of 60 cruise missiles to Iran, which I viewed as a direct violation of the Iran-Iraq Non-Proliferation Act of 1972, my legislation required the President to impose the sanctions provided for by the 1972 act against China. In addition, because I believed the Chinese sale was so dangerous, my legislation suspended the President's ability to waive those sanctions.
I have also taken other steps to thwart China's ability to export dangerous armaments and weapons of mass destruction. I voted for the Cochran amendment to the FY '98 DoD Authorization bill to control the export to China of supercomputers that could be utilized by them in their development of missiles and in exploiting nuclear technology. I also supported the Hutchinson amendment to the FY '99 DoD Authorization bill to study the development of U.S. Theater Missile Defense systems against potential Chinese ballistic missiles.
Based on this track record and of my continuing concerns for China's actions in this area, I felt compelled to support the Thompson amendment because I believed it was the wisest approach to dealing with this very real threat to our national security. To those who argued that the Thompson amendment would undermine the very principles upon which PNTR was based, I would counter that Senator Thompson made a number of significant modifications to his legislation to address these very concerns.
The Senator from Tennessee went to great lengths to ensure that American agriculture would be spared the brunt of any trade actions taken against China. This ensures that our farmers are not unfortunate victims of attempts by U.S. policymakers to punish the Chinese for their behavior in non-trade areas. Senator Thompson also gave the President greater flexibility to respond to crises by making sanctions against supplier countries under the act discretionary rather than mandatory. And the evidentiary standard in the legislation for imposing mandatory sanctions on companies identified as proliferators has been raised to give the President discretion in determining whether a company has truly engaged in proliferation activities.
So I believe the most problematic areas of Senator Thompson's original legislation have been addressed responsibly and that made it worthy of support. While I remain a staunch supporter of PNTR for China and supporting China's accession into the WTO, I simply cannot ignore China's past practices in the area of missile sales to rogue nations and it's role in nuclear proliferation. The U.S. must maintain the ability to confront such aggressive arms practices abroad as a means of protecting its own national security.
In conclusion, I am keenly aware of the deeply divided feelings Americans have over the questions of PNTR and China's accession to the WTO. There are few, if any, states in which feelings are more polarized on this subject than in Michigan. I respect the fact that sincere people can and will draw a conclusion different from mine. To those who came to a different conclusion, I say that we here in Congress have promised to pay close attention to the reports issued by the Congressional-Executive Commission on Human and Labor Rights created in this legislation. If China's behavior does not improve and if they do not abide by the agreements they have signed, I am sure that Congress will respond accordingly. I certainly intend to.
As many of my colleagues may know, both my wife and I grew up in union households. Her father was a member of the United Auto Workers. And my father was a UAW member as well. That is not an uncommon situation in a state like Michigan, as you can well imagine, where a significant percentage of the population is employed either by one of the automakers or one of the various supplier companies. But like most Michiganders who grew up in a union household or are currently living in one I know what it's like to see a father or mother come home celebrating a raise or some benefits they had secured in a recently ratified contract. And I also know the pain and stress that goes with layoffs or plant closings, things my state has had all too much experience with in the not too distant past.
Many current union workers and their families have come up to me in the past year and said they were scared about what will happen if we pass PNTR and allow China into the WTO. They fear that the Chinese will not live up to the commitments they have made with respect to eliminating trade barriers or that American companies might choose to move their operations overseas leaving workers here unemployed and without any available jobs or careers into which to move. Those are very real fears. And I take those concerns very seriously and to heart.
China will open its markets in the very near future. The question is: Will U.S. firms be among those competing for these new markets, competing for a portion of the one billion new consumers that are going to be available in China? Or are we going to cede those new opportunities to our competitors in Europe, Asia, and South America? Likewise, the question is not whether U.S. companies will eventually do business in China. The question is whether it will be on our terms or on China's. Will companies be forced to move over to China in order to avoid high tariffs, quotas on U.S. produced goods, or other restrictions which make it difficult for them to do business there? Or will we attempt to eliminate such barriers to market access now through negotiation, so that U.S. companies can continue to operate here in the States, employing U.S. workers and paying U.S. Taxes, and still export goods and services to China in a competitive environment with our trading competitors?
I think when most workers consider the options we face, they will agree that the best course for our nation is to join with the other nations of the world in accepting China into the WTO and attempting to work with the procedures available there to open their markets further and ensure they live up to the commitments they have already made.
That is the conclusion to which this Senator has come. That is why I voted for permanent normal trade relations for the Peoples' Republic of China. That is why I support China's accession to the WTO.
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