Copyright 2000 Federal News Service, Inc.
Federal News Service
May 23, 2000, Tuesday
SECTION: PREPARED TESTIMONY
LENGTH: 861 words
HEADLINE:
PREPARED TESTIMONY OF THE HONORABLE MICHAEL G. OXLEY
BEFORE THE
HOUSE COMMERCE COMMITTEE SUBCOMMITTEE ON FINANCE &
HAZARDOUS MATERIALS
SUBJECT - PNTR: OPENING THE
WORLD'S BIGGEST POTENTIAL MARKET TO AMERICAN FINANCIAL SERVICES COMPETITION
BODY:
This week we will be called upon to
vote on a pivotal issue. Witness List & Many have called the vote on
granting Permanent Normal Trade Relations with China the most significant vote
before Congress in decades. In casting this vote, we will be choosing whether
"economic integration" or "economic isolation" is most likely to foster
democracy and capitalism in China.
There is much to be desired of
China's democratic and economic record. The Maoist legacy still permeates the
country through state controls in social and economic life. Nevertheless, the
last 20 years show a pattern of China moving toward a market economy. Progress
has been slow, and at times frustrating. But the fact remains that China has
become significantly more democratic and capitalistic than it was in 1978. As
the single remaining super power, the United States and its support of China's
WTO accession is critical to integrating China into our global free markets and
rule of law. While a negative vote for PNTR will not prevent
China's accession to the WTO, it will put United States businesses and workers
at an overwhelming competitive disadvantage versus our competitors in Asia,
Latin America and Europe. A negative vote means that only the United States will
be denied the benefits and protections that China's accession to the WTO will
confer on all other WTO member countries.
China's accession to the WTO
will facilitate the shift of economic power from state owned enterprises to
private-sector market participants. And economic prosperity increases pressure
for greater democracy. As Federal Reserve Board Chairman Alan Greenspan recently
observed, "History has demonstrated that implicit in any removal of power from
central planners and broadening of market mechanisms (as would occur under WTO)
is a more general spread of rights to individuals." In fact, we have just
witnessed this unfolding of democracy in South Korea and Taiwan over the last
two decades as they have integrated with international free markets.
WTO
accession will not only benefit China -- accession will translate into greater
global harmony. Free trade is more likely to foster cooperation than hostility.
As China's global interdependency grows, so will its compliance with
international protocols. This is precisely why Taiwan supports China's accession
to the WTO.
For WTO members, including the United States, China's WTO
accession means increased access to the world's largest potential market. That
translates to new opportunities and new jobs for American businesses and
workers. With an aging population of 1.2 billion people, the potential
opportunities for American financial services providers are dramatic. It has
been estimated that, under the full benefits of China's WTO-related market
opening, our annual exports to that country would grow between eight and ten
billion dollars by 2005.
In fact, the financial services agreement to
which China agreed in the WTO negotiations represents the largest single trade
agreement in history -- it covers 60 trillion dollars in banking, insurance, and
securities transactions each year.
Furthermore, this trade agreement
represents unilateral gain by American workers and businesses. China has offered
major concessions in return for WTO membership, while the United States has
agreed only to preserve its existing market access - without any new
concessions. For example, China has unilaterally provided for greater U.S.
market access in telecommunications and financial services, and has agreed to
phase out numerous import quotas, licensing and ownership requirements, and
geographic restrictions. And just last week, the European Union reached
agreement with China in its WTO negotiations, gaining further concessions. Those
benefits will accrue to all WTO members, including the United States -- IF we
approve PNTR this week.
In addition to the
opportunities a successful PNTR vote offers American companies
and workers, a succesful PNTR vote provides our companies and
workers with protection in the form of the WTO dispute resolution system. The
U.S. will be able to use that dispute resolution system to protect its rights --
with the support and pressure from 114 other WTO member countries who have
similar interests in forcing open China's markets.
We must remember that
China's WTO accession does not hinge upon this week's PNTR
vote. WTO members will reap the benefits of China's accession regardless of the
Congressional vote on PNTR. If Congress votes for
PNTR, we will share in those benefits. If we vote against it,
we will not. This is a chance we should not pass up. Extending
PNTR to China is not only good economic policy, it is a good
way to influence political reform. It will be much easier to influence Chinese
reform as a trading partner than as the only WTO member that refuses to extend
PNTR to China.
Today we will hear from representatives
of the finance, insurance, and high-tech industries. They offer a vital
perspective on how PNTR will impact our nation's economy, our
businesses, and our workers. I thank them for their testimony and look forward
to hearing what each has to say.
END
LOAD-DATE:
May 25, 2000 
