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The SPEAKER pro tempore. Under a previous order of the House, the gentleman from Nebraska (Mr. BEREUTER) is recognized for 5 minutes.
Mr. BEREUTER. Mr. Speaker, last week, U.S. trade negotiators once again met with their Chinese counterparts in an attempt to discuss China's accession to the World Trade Organization, the WTO. Unfortunately, but also predictably, these talks did not produce any significant breakthroughs. The Chinese repeated their same old, unsatisfactory demands while offering only minimal concessions.
Though the Washington, D.C. rumor mill and so-called conventional wisdom are predicting that the forthcoming Sino-American meeting between President Clinton and Chinese Premier Zhu Rongji will showcase an agreement for China's WTO accession, the United States and China remain so far apart on so many trade issues that this Member is doubtful that a complete and commercially viable agreement can be reached in such a short time frame.
Instead, the President and the Premier will be faced with China continuing to have a huge and growing trade surplus with the United States. The record $60 billion trade deficit with China in 1998 represents a 15.5 percent increase over the 1997 level. Now as the trade deficit with China is averaging more than $1 billion per week, under current trends the projected trade deficit for 1999 could exceed $70 billion. It is also clear that the American exports will continue to face new and growing problems of access to the Chinese markets.
It seems to this Member that the underlying problem remains that China already enjoys, without making any real concessions, the low tariff benefit of normal trade with the United States. From the Chinese perspective, why should they change?
Recognizing that China gets a free ride into U.S. markets without giving U.S. exporters similar, fair treatment, the distinguished gentleman from Illinois (Mr. EWING), the distinguished gentleman from Mississippi (Mr. PICKERING) and this Member have again introduced legislation that gives American trade negotiators the tools needed to pry open China's markets as we did last Congress on May 22, 1997.
This legislation, the China Market Access and Export Opportunities Act, requires that China either make an acceptable offer to join the World Trade Organization or face snap-back tariffs. That is a reasonable approach to negotiations that are stymied and a U.S. trade deficit that is rapidly growing and unsustainable.
The Bereuter-Ewing-Pickering legislation will help induce China's leaders to comply with the world trade rules by eliminating our annual normal trade relations review when China accedes to the WTO. No longer will the President have to waive or certify that China meets Jackson-Vanik requirements. China, under this legislation, will receive normal trade status routinely unless either the Congress or the President use other existing authorities to raise tariffs on China's goods. As a result, this action will eliminate Beijing's contention that China could make all of the structural and trade liberalization changes necessary to join the WTO only to have the U.S. Congress continue its annual and increasingly contentious NTR reviews.
The China Market Access and Export Opportunities Act requires the President to first determine if China is, quote, not according adequate trade benefits, close quote, as defined in existing law to the United States; and second, if China is not taking adequate steps to become a WTO member by January 1, 2001. This is also the date by which the current bilateral U.S. trade agreement must be renewed. If the President makes a negative conclusion on either of these two findings, then the President shall announce the imposition of snap-back tariffs on China within 6 months of that determination. In imposing the snap-back tariffs, the President has wide discretion to determine both the amount of the tariff and on which categories of products the snap-back tariffs will be imposed. However, under no circumstances can the President exceed the legislation's snap-back tariff ceiling which is the pre-Uruguay round MFN tariff rate; in other words, the Column 1 tariff rates in effect on December 31, 1994.
A study by the Congressional Research Service estimates an additional $325 million in tariff revenue would be generated for the U.S. Treasury if the President were to utilize his full snap-back authority, for example, on just the top 25 Chinese exports to the United States. This estimate, based upon 1995 figures, is not adjusted to reflect any downward demand for the products due to the increased tariff.
The President would be required under this legislation to terminate the imposed snap-back tariffs on China on the date China becomes a WTO member or on the date the President determines that China is according adequate trade benefits to the United States and making significant steps to become a WTO member, whichever is earlier. The President also will be able to modify any of the snap-back tariffs upward within the cap or downward in response to Chinese actions or inactions as long as the appropriate congressional committees are notified.
Mr. Speaker, I urge my colleagues to support and cosponsor the Bereuter-Ewing-Pickering legislation.
Because the China Market Access and Export Opportunities Act proposes tariffs averaging from 4% to 7% rather than the average 44% tariff increase which would result if NTR is revoked, our proposal is realistic and enforceable and Beijing will have strong motive to move to WTO membership and reciprocally open their markets. Currently, China's leaders in effect ignore Congress' annual threat to revoke NTR because they know we will not impose such draconian tariffs on U.S. imports. China knows that the impact of such severe import duties on economies of important U.S. partners like Hong Kong and Taiwan would be excessively damaging. By giving the President the flexibility to vary and modify these tariffs within the statutorily imposed level, our ``scalpel-like'' snap-back mechanism-rather than the ``meat axe'' approach of the annual NTR process-greatly increases the United States Trade Representative's ability to negotiate acceptable terms for China's accession to the WTO. It is a realistic carrot-and-stick approach.
Mr. Speaker, China's desire to join the World Trade Organization represents an historic opportunity for the United States to level the playing field for U.S. companies, workers and farmers to sell their products in China. However, this opportunity will be lost if the U.S. Congress and the Administration do not agree on a responsible strategy to coax China into that organization after it has met eligibility standards. The China Market Access and Export Opportunities Act is a tough but reasonable way to pressure Beijing to eliminate those trade barriers and structural impediments which currently stand between China and its membership in the WTO. The economic and trade liberalization reforms in China which this legislation promotes will reduce our enormous and ever-growing bilateral trade deficit and benefit American workers and consumers while stimulating the most positive forces of political and social change in China. It is a win-win approach which this Member encourages his colleagues to support by supporting the Bereuter-Ewing-Pickering legislation being introduced today.
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