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“TO AUTHORIZE EXTENSION OF NONDISCRIMINATORY TREATMENT TO THE PEOPLE'S REPUBLIC OF CHINA--MOTION TO PROCEED--Continued” mentioning the U.S. Dept. of Commerce was published in the Senate section on pages S7981-S7983 on Sept. 5, 2000.
The publication is reproduced in full below:
TO AUTHORIZE EXTENSION OF NONDISCRIMINATORY TREATMENT TO THE PEOPLE'S
REPUBLIC OF CHINA--MOTION TO PROCEED--Continued
The PRESIDING OFFICER. The distinguished Senator from Iowa is recognized.
Mr. GRASSLEY. Mr. President, we started earlier today the initial discussion of what I call the China trade bill, the Senate by law ratifying the agreement that has been worked out by this administration and the Government of China to level the playing field for trade between the United States and China.
In a simple form, the bill before us will give access for U.S. exporters--meaning manufacturing, services and agriculture--to China on the same basis that China has had access to our markets for the last 15 to 20 years.
When you have an opportunity for our people to export to China, to sell to China, on the same basis that China has been able to do with the United States, it is a win-win situation. My Midwestern common sense tells me this is a good situation for America. So that debate has started today.
We are on the question of the motion to proceed. I support this motion. I hope we get to a final vote on the bill, because I think it will pass by an overwhelming margin, not the very narrow margin that it passed in the House of Representatives. This will give us an enhanced opportunity to do business with 20 percent of the world's population.
There are many reasons I support this bill, which is probably one of the most important matters to come before the Senate this session. But today, I would like to address just two reasons. The first is the issue of jobs, a very positive aspect to this legislation. The second is human rights, which some people view as a reason for being against this legislation. I suggest to you that even though the human rights situation in China is not good, trade gives us an opportunity to improve that human rights situation.
In each case, I want to address concerns of real people in a commonsense way. Too often, when we talk about major policy changes, we do so in lofty terms, not connected to the people's concerns and their interests, and what is important to everyday working Americans.
Today, I would like to talk about how real people will be affected by making it possible for the United States to take advantage of China's pending accession to the World Trade Organization.
Lowering protectionist tariffs and tearing down trade barriers that discriminate against American products will create many thousands of new American jobs. A new era of free trade with China, under the WTO World Trade Organization disciplines, will help us continue to build the tremendous prosperity that we enjoy as a direct result--a very direct result--of the success of our postwar trading system; going back to 1947, as we have used the gradual freeing up of trade around the world to expand the world economic pie. Because of free trade, with a population that is now about double what it was back then, we now have more prosperity for more people. If we had not expanded the world economic pie, we would, in fact, have less for our increased world population. So think in terms of the economic enhancement of individuals and the political stability that comes from it.
In my State of Iowa, we know our economic interdependence with the rest of the world is not a policy choice; it is a fact. Trade means jobs anywhere, but particularly in my State. In just 5 years, Iowa's merchandise export to China has soared 35 percent.
In the Waterloo-Cedar Falls area--that is close to where I was born, and where I have lived my entire life--recent merchandise sales to China have surged 806 percent. Iowa's trade-related jobs mean that a young couple can afford their first home. They can afford tuition for school. They can afford to buy a car. They can afford to care for their families, the way working people want to care for their families.
But unless we seize this moment, this opportunity will pass us by. When China enters the World Trade Organization, which it will do regardless of the outcome of this vote on the Senate floor--and if we do not remove all of our current conditions on trade with China, which this bill does--other countries will reap the rewards of a trade deal that we helped negotiate. American companies then would be forced to sit on the sidelines as companies from the European Union or Asia or Africa or elsewhere take our business and ultimately take our jobs because we have not assumed this opportunity of freer trade with China.
If we pass up this opportunity, America will be at the end of the line of the 137 other WTO countries, that will be standing in front of us, trading with China.
I want to give my colleagues two real-life examples from my State of Iowa.
Tucker Manufacturing Company is a family-owned business in Cedar Rapids, Iowa, that has developed a unique window-washing system which it makes and sells around the world. Tucker has made a few small sample sales to China and has found a distributor that would like to make a large order. Tucker knows that in the past state-owned distribution companies in China have dictated commercial terms that have often harmed exporting companies like Tucker. They would like to see China become a World Trade Organization member so that distribution rights are no longer strictly controlled by the state, meaning the country and Government of China, and so that any new transactions in China then are protected by the rule of law, which is what the World Trade Organization regime is all about--the rule of law, predictability in international trade, the resolving of disputes in international trade.
A second example from Cedar Rapids, Iowa, is the Diamond V Mills Company, which I visited just last week. I had the opportunity to present it with the Commerce Department's E-Star Award for excellence in exports. They had already received the E award, now they have the E-
Star award that indicates they have been highly successful in international trade on an ongoing basis.
Diamond V Mills has exported its yeast culture feed ingredients to China since 1996, but they did it by operating through a local distributor. The company wants to sell directly to its end user but has not been able to do so--until this agreement goes through--due to China's current restrictions on a foreign company's rights to distribute its products in China.
Under the WTO accession agreement, China has committed to opening its markets to the private distribution networks that Diamond V Mills of Cedar Rapids needs. If Diamond V Mills can get access to new distribution networks in China, it will generate more sales, earn more revenue, provide more jobs in Iowa, create more opportunity and more prosperity for everybody.
These are only two examples of how Iowa's manufacturing sector will benefit through expanded trade with China. There are many more. We have Iowa's farmers and agricultural producers seeing tremendous benefits from this proposal as well because China's World Trade Organization accession agreement will dramatically lower agricultural tariffs and eliminate many nontariff trade barriers. As a result, our farmers will sell more soybeans and more soy oil to China than ever before.
After the United States, China is the second largest consumer of corn and corn products in the world. As the distinguished Presiding Officer knows, my State is No. 1 in the production of corn in the United States, as his State is No. 1 in the production of wheat.
China's WTO commitments will create a great export opportunity for Iowa's corn growers and for corn growers across the United States.
Iowa State University professor Dermot Hayes recently told my international trade subcommittee that if China fully implements its WTO accession commitments we could see hog prices rise by as much as $5 per head. That is a larger benefit than any of the Government support programs we have heard about lately.
Unlike some of the proposals I have heard, we would not have to impair our obligations under the WTO's subsidies agreement, or the WTO agriculture agreement, to do it.
Second, I want to discuss the issue of human rights and political freedoms in China because this is a legitimate issue, even though I disagree with the argument that killing this bill is going to help human rights in China. I wish to make it clear I don't find fault with those who bring it up as part of this debate because I think wherever we can try to say to China that they are going down the wrong road on human rights, they are hurting their country, not us.
Like all Americans, Iowans care deeply about the struggle for liberty. Many have family members who have given their lives in freedom's cause, or they know someone who has. It hurts us to hear horrible accounts of repression. We are rightly repelled. We don't understand why it happens, and we want it to change because we think freedom is an innate right for the Chinese as well as for Americans. But the fact is, we can never turn China into a model of constitutional democracy if we isolate them economically. However, we can help bring about fundamental reform in China's economy and political structure through enforceable WTO rules that do not discriminate and are consistent and are not arbitrary.
In addition, I have a firm conviction that regardless of how necessary a political and rule of law environment is for trade to take place and political leaders such as the President of the United States and other people negotiating with the Chinese, none of those efforts, as important as they are, can compare to the opportunities for advancing political freedom and human rights that will come when millions of American businesspeople interact with millions of Chinese businesspeople on a day-to-day basis. That is going to do more to improve human rights than anything else.
When it comes to making decisions, the WTO applies the democratic principle of consensus rule. All of these principles--democratic decisionmaking, nondiscrimination, nonarbitrary regulation--are also the obvious, essential ingredients of political freedom. The process of economic reform, guided by China's WTO commitments, will mean that China will become more open. They will eventually become more free. We know, perhaps better than any nation on Earth, that economic and political freedoms share deep roots.
That economic and political rights go hand in hand is at the heart of America's constitutional heritage. Many in China know that economic and political reform are closely linked as well. That is why many of China's military hardliners oppose China's entry into the World Trade Organization.
Perhaps it is this inevitable linking between economic reform and political freedom that has inspired the Dalai Lama, no stranger to China's religious repression, to say:
I have always stressed that China should not be isolated. China must be brought into the mainstream of the world community. . . .
To those who doubt that economic reform has occurred in China, or that it is significant, I ask them to consider how much has changed in the last half century. You will remember that in 1952, China's Communist government mounted a wide-ranging crusade to undermine private entrepreneurs, businesspeople were commonly condemned as
``counterrevolutionaries,'' and many were assessed large fines and forced out of business.
In fact, by 1956, China required all private firms to be jointly owned and, in fact, run by the government. In practice, this meant that we had state control of all private enterprise in China. It wasn't until the early 1980s that private enterprise began to reemerge in China. More significantly, it wasn't until 1988 that the private economy even had a defined legal status in China.
Today, 12 years later, China is a different country. Today, young Chinese engineers who studied and worked in California's Silicon Valley are going back to China, lured by entrepreneurial opportunities that didn't even exist a few years ago.
The number of individuals employed by the private sector in China has soared by over 31 percent in the last 3 years. That is bad news for China's state-owned enterprises. That happens to also be bad news for China's People's Liberation Army, which depends on many state-run businesses for revenue and have opposed these reforms that are going on within China, including this agreement before the Senate.
But this development is good news for the cause of freedom. As the number of individuals employed in the private sector rises, the state will have less and less direct control over how people think and how people react to political change.
Massachusetts Institute of Technology professor Edward Steinfeld is one of our country's keenest scholars on what goes on in China. This is what he had to say about the meaning of China's World Trade Organization concessions on China's direction as a country:
The concessions of 1999 represented a thorough reversal of course. Instead of reform serving to sustain the core, the core itself would be destroyed to save reform, along with the growth, prosperity, and stability reform has brought to China.
In the new view, instead of using market forces to save state socialism, state socialism itself would have to be sacrificed to preserve the market economy.
I agree with Professor Steinfeld. China's membership in the World Trade Organization will require it to reform a very large portion of its economy, and not only to comply with WTO rules, but to be able to compete internationally.
With a ``yes'' vote on the motion to proceed and a ``yes'' vote on approving permanent normal trading status for China, we can help change the world. China constitutes one-fifth of the world's population. We can be on the right side of history. We ought to be on the right side of history. I urge a vote for this motion to proceed and a vote of yes on final passage.
I yield the floor.
Mr. REID. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Brownback). Without objection, it is so ordered.
The PRESIDING OFFICER. The Democratic leader.
Mr. DASCHLE. Mr. President, I would like to use an amount of my leader time prior to the time we go to the energy and water bill to speak on an unrelated matter.
The PRESIDING OFFICER. The Democratic leader is recognized.
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