Copyright 2000 Federal News Service, Inc.
Federal News Service
February 16, 2000, Wednesday
SECTION: PREPARED TESTIMONY
LENGTH: 1081 words
HEADLINE:
PREPARED CONGRESSWOMAN NANCY PELOSI
BEFORE THE
HOUSE WAYS AND MEANS COMMITTEE
SUBJECT - THE
U.S.- CHINA BILATERAL TRADE AGREEMENT AND THE ACCESSION OF CHINA TO THE WTO
BODY:
Our relationship with any country
should make trade fairer, the world safer and people freer. Indeed, the current
U.S.-China relationship has ignored three pillars of foreign policy promoting
democratic values, stopping the proliferation of weapons of mass destruction and
growing our economy by promoting U.S. exports abroad.
For the past
decade, the debate in Congress on U.S.-China policy has focused on human rights,
proliferation and trade. Advocates of unconditional Most Favored Nation (MFN)
status have argued that economic reform would lead to political reform in China.
Unfortunately, just the opposite is the case. While the Chinese government
negotiates bilateral trade agreements, it escalates a crackdown on peaceful
activity in the areas of religion, the Internet and on any organization
perceived to be a threat to their rule. China continues to make the world a more
dangerous place by its cooperation with Pakistan's missile program, cooperation
with Iran and threats to the democracy in Taiwan. But putting aside concerns of
ongoing human rights violations and the continued proliferation of weapons of
mass destruction, I believe the decision to oppose permanent Normal
Trade Relations (NTR) at this time is justified on trade concerns
alone.
When we started this debate ten years ago the trade deficit was
$6 billion for 1989. Now it has grown to almost
$70 billion for 1999. China continues to violate our trade
agreements and we continue to reward them for it.
The debate before us
is of critical importance to our economy and the global trading system.
Permanent NTR must not be rushed and we must have a full and open debate on all
aspects of this decision. In light of China's pattern of violation of trade
agreements and the rapidly increasing trade deficit, I believe that the U.S.
Congress should not give up its authority to review annually China's trade
record at this time.We should wait to see if China takes steps to implement the
bilateral agreement before we consider permanent NTR. The WTO agreement with
China will be phased in over five years, but we will give up our leverage if
permanent NTR is passed now, before we have evidence that the agreement will be
implemented.
Already there is reason to be concerned that Chinese
officials are backing away from the bilateral agreement. For example, on wheat,
the USTR Fact Sheet states that "China will establish large and increasing
tariff rate quotas for wheat.., with a substantial share reserved for private
trade." But, only a few days later, China's chief WTO negotiator stated that "it
is a complete misunderstanding to expect this grain to enter the country...
Beijing only conceded a theoretical opportunity for the export of grain." (South
China Morning Post, January 7, 2000)
On insurance, the USTR Fact Sheet
specifically states that "China agrees to award licenses (to U.S. insurance
firms) solely on the basis of prudential criteria, with no economic needs test
or quantitative limits." But Ma Yongwei, chairman of the China Insurance
Regulatory Commission sees things differently. He states that "even after
accession to the WTO, Beijing reserved the right to block licenses for foreign
insurance companies if their approval seemed to threaten stability of economic
policy." (.Financial Times, November 19, 1999)
Any possible WTO
agreement must be viewed against the background of the Chinese government not
complying with agreements it has signed.
China's compliance with a
well-conceived, commercially acceptable and enforceable WTO agreement would be
an improvement over China's wholesale violations of international trade
practices. However, with China's pattern of refusing to play by the rules, a WTO
agreement that is not realistic or enforceable will wreak havoc on the
international trade regime.
As events leading up to the Seattle
Ministerial and the Ministerial itself illustrate, the WTO is on shaky ground.
Unless China's WTO accession is done properly, it will further weaken the
organization. Enforcement is key.
There is little evidence that the
Chinese government will honor the commitments it makes in either a bilateral or
multilateral forum. Examples of China's trade violations are as follows:
MARKET ACCESS
- Despite negotiating a 1992 MOU on market access,
China has clearly violated the agreement by instituting non-tariff barriers,
import/export licenses, import quotas, import substitution policies, and
measures which prohibit imports of U.S. citrus, plums and wheat. (1999 Trade
Estimate Report on Foreign Trade Barriers)
INTELLECTUAL PROPERTY
China has been named three times under the "Special 301" trade law for
failing to provide adequate protection of copyrights, patents and trade secrets.
- "Of particular concern is the significant level of unauthorized use of
software by both private enterprises and government ministries." (1999 Trade
Estimate Report on Foreign Trade Barriers.)
FORCED LABOR
- In
1992 and 1994, China signed agreements that it would not export products of
forced labor to the U.S. and would allow visits of U.S. officials to suspected
sites.
But, the State Department's 1998 Report on Human Rights
specifically finds that: "In all cases (of forced labor identified by U.S.
Customs), the (Chinese) Ministry of Justice refused the request, ignored it, or
simply denied the allegations without further elaboration."
- The Laogai
Research Foundation has also documented nearly 1,100 forced labor camps in
China. In these camps there is no due process, no compensation for work,
conditions are severe and physical punishment is rampant.
The Chinese
government has a remarkably consistent record of violating its international
commitments. Some argue that allowing China into the WTO will force them to play
by the rules. The reality is that the Chinese government will not abide by their
agreements if it is not in their interest to do so.
Even if we ignore
China's continuing violation of human rights,
Even if we ignore China's
ongoing proliferation of weapons of mass destruction, On the basis of trade
issues alone, Congress should not surrender its authority to review China's
trade status. Congress should insist that China take steps to implement the
bilateral agreement before permanent NTR is adopted. I am preparing legislation
to that effect.
This decision is too important to our economic future to
base it on a litany of broken promises instead of a record of performance.
END
LOAD-DATE: February 17, 2000
