AUTHORIZING EXTENSION OF NONDISCRIMINATORY TREATMENT (NORMAL TRADE RELATIONS TREATMENT) TO PEOPLE'S REPUBLIC OF CHINA -- (Extensions of Remarks - May 25, 2000)

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SPEECH OF HON. JOHN J. LaFALCE

OF NEW YORK IN THE HOUSE OF REPRESENTATIVES Wednesday, May 24, 2000

Mr. LAFALCE. Mr. Speaker, the vote this week on whether to establish Permanent Normal Trade Relations (PNTR) with China will undoubtedly be the most important one we will take in this first year of the new millennium. I rise today to express my intent to vote ``yes'' on granting stable trade status to China and to explain, in some detail, the reasons behind my decision.

This issue involves the economies of the United States and China, and indeed the economies of nations around the world. But the judgments to be made involve far more than economic concerns alone. What we do this week will affect national and international security. It will set the agenda for how the U.S. interacts with China on such important matters as human and worker rights, the environment, and religious freedom. And it will help to determine how both the U.S. and China address the rest of the world for decades to come.evolution in china

Over the last two decades, I have been fortunate to witness the social and economic evolution in China ``up close and personal.'' In January 1979, I traveled to Beijing as part of a Congressional delegation representing the United States as we reestablished diplomatic relations with China, This past week I reminisced with President Carter about that historic day, the intervening twenty years, and today's historic vote. We share virtually identical views.

Twenty years ago China was a backward, drab country just starting to recover from the disaster that Mao called ``the Cultural Revolution.'' The streets were crowded--with pedestrians and bicycles. A few newspapers posted on a few walls were the only visible demonstration of ``openness'' allowed by the government at that time.

I went back to China a few years ago. The change and the progress in the human condition were profound. What had been gray now had a rainbow of color. Economic development--and the entrepreneurial spirit--was evident around every corner. The streets were still crowded, but this time jammed with cars. And the newspapers plastered on walls had been supplanted by cell phones and laptop computers with Internet access. There was an openness that I believed was virtually irreversible, although much progress still needs to be made.

Two personal stories: (a) when first in China, a colleague used a Polaroid camera and the Chinese people thought a miracle had been wrought. They had never before seen themselves in print. Today, Eastman Kodak sells more film in China than in any other country in the world outside the United States; (b) when last in China, a human rights activist said to me, ``Let's keep in touch. What's your e-mail address?'' That's progress.

I have no doubt that commercial relations between China and the United States--and the rest of the world--contributed substantially to these changes in Chinese society. Mao's approach was wrong, and the actions, if not the words, of subsequent leaders in Beijing have demonstrated that they know he was wrong. They have opted for a movement toward a market economy, with all that means for progress and development and, ultimately and inevitably, various forms of freedom.

This view is also held by both President Jimmy Carter and President Bill Clinton, by both Vice President AL GORE and Senator Bill Bradley, by both Governor George W. Bush and Sen. JOHN MCCAIN, by both Senators from New York and by both Senate candidates in New York.

I believe that bringing China further into the international economic system will only accelerate these trends. And I am persuaded that these trends enhance freedoms for the Chinese people which, in turn, should make Asia and the world more secure.bilateral U.S.-china trade

Looking at this purely in commercial terms, it seems fairly clear that the consequences of rejection of PNTR on U.S. businesses generally would be quite severe. There is virtual unanimity in the business community that welcoming China into the WTO--which will happen regardless of how the upcoming vote in Congress goes--and stabilizing our trading relations with that massive and growing market is in our economic interest. And if that were the only criterion on which to base our vote, the decision would be easy indeed.
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We should also keep in mind that the vote is solely on the status of our trading relationship with China. It is not a vote on whether to permit China to join the WTO. That will happen regardless of how Congress votes. The agreement before us contains provisions which substantially open up China's market to U.S. goods and services, but

Even if we wanted to, we cannot build an economic wall around China and one-fifth of the world's people. Outsiders will trade with China; the only question is whether and to what extent they will be Americans. I fear that opposing this agreement would be tantamount to building a wall around ourselves, trying to deal with the world by ignoring it. Throughout the 20th Century we have seen all too often how ineffective such an approach can be.

These points were among those made just last week by Federal Reserve Board Chairman Alan Greenspan when he went to the White House to endorse approval of normalizing trade relations with China.

Looked at from the perspective of New York State, and from my role as the ranking Democrat on the Banking Committee, the case is equally strong. New York's financial services industry is a key source of economic growth and job creation--in the state and nationally--and this agreement will be of enormous economic benefit to that industry.

This is not to say that the business community has been entirely right in its approach to this issue. Quite the contrary. American business leaders have almost refused to acknowledge that the concerns about workers' rights, human rights, religious freedom and the environment are legitimate ones. They have resisted calls for even minimal standards in these areas. What they fail to recognize is that trade requires both capital and labor, and that therefore it's not inappropriate for a trade deal to address concerns of both capital and labor. What they ignore in this situation, as they have so often here at home, is that environmental degradation is a real cost of doing business, just one that doesn't happen to show up on their balance sheet. I wish that there had been greater recognition of these legitimate concerns by the business community as this debate progressed. Jobs and Workers' Rights

My friends in the labor movement express concerns that approving the China agreement might mean loss of jobs in the U.S. And they also express concerns that a vote for the agreement might be seen as approval of some of the very serious ways in which the regime in China undermines workers' rights there.

These are real concerns. I do not make light of them. The labor leaders who express them are not alarmists; they are in the great tradition of leaders who have helped make the United States the most productive economy in the world; leaders who played such a large role in bringing down communism in the former Soviet Union and eastern Europe.

But I also have deep respect for other labor leaders who take a different view. One is both the former President of the U.A.W. and the former Ambassador to China, Leonard Woodcock. No one would ever describe him as naive, and he was one of the most forceful and effective leaders the United Auto Workers ever had. His view of the proposed trade agreement is that it is an imperative to advance our national interests. Human Rights and Religious Freedom

The leadership in Beijing, while improving the human condition of the Chinese people in many ways over the past twenty years, still has demonstrated inadequate concern. I abhor, for example, population policies which condone and sometimes even demand forced abortions. Freedom of speech and association, among our most cherished treasures, are still being developed in China. And too often, individuals are discriminated against because of their religious beliefs.

In the 19th Century, our nation was abhorred, and rightly so, because of slavery. And subsequently, well into the 20th Century, our society condoned or tolerated lynchings, burnings, and massive racial discrimination including denial of the most fundamental right, the right to vote. Those policies are and were wrong, our nation was wrong. We were equally wrong in denying women the vote for so long. But, fortunately, we were not ostracized from the world community. Rather, other countries dealt with us, despite our shortcomings, and we with them, despite their failures. Our nation evolved and improved, without others seeking to impose their approaches on us. They engaged us, and we learned.

I believe that influencing human rights in another country can be done far more effectively through engagement than through isolation. I believe that if we immerse China with American people and products, it will generate broader freedoms in that nation. I believe that if the Chinese see and interact with Americans, tourists and business men and women, they will see what freedom brings and will demand, and get, more freedoms for themselves.

We should not ignore the situation in Tibet or the recent efforts to suppress the Falun Gong, And some human and religious rights advocates, from China and elsewhere, think that disapproval of PNTR will enhance the cause of freedom inside China. But there are many other human and religious rights advocates who disagree strongly. For example, the views of Martin Lee and other human rights advocates in Hong Kong are particularly striking, to say nothing of the new democratic leaders in Taiwan, and the Dalai Lama. They believe that engagement with China and approval of PNTR will advance the cause of human rights in mainland China.

Moreover, individuals in the United States who have dedicated their lives to advancing human rights and religious freedom for the people of China support granting PNTR with China. President Jimmy Carter argues persuasively that a negative vote would deal a serious setback to further democratization, freedom and human rights in China. Prominent Catholics, among them former-Member of Congress, Father Robert F. Drinan; University of Notre Dame President-Emeritus Father Theodore Hesburgh; and Father Peter Ruggere with the Maryknoll Fathers all support PNTR for China and believe it is how the U.S. can best advance human rights and religious freedom for the people of China. And the Quakers have expressed their belief that normalization of

As we rightly criticize China for policies that we abhor, let us also remember that she has done some things that are very praiseworthy as well. China is a poor nation, relatively speaking, but, if nothing else, they have found ways to ensure that their vast population has enough to eat. The poverty level in China is only nine percent, versus a poverty level of over 40% in India. Further, during the recent economic crisis in Asia, China stood the course, resisting the lure of steps which might have helped their economy in the short term (such as devaluation of their currency) but which would have meant much more serious problems for the entire region in the longer term. Finally, China has allowed and is supporting the spread of phones--from virtually none to about 130 million in a generation--and access to the Internet for millions--the greatest democratizing tool the world has ever known, for it brings ideas from every corner of the world. Clearly, the ability to communicate is a fundamental right that has grown dramatically because of our twenty years of engagement. international security and geopolitics

China is arguably the second strongest conventional military power in the world, and of course it is also a member of the nuclear club, with a small but growing capability to deliver nuclear arms. China's relations with her neighbors--Russia and India in particular--become difficult at times. And the situation concerning Taiwan is potentially the hottest ``hot spot'' in Asia if not the world.

We should not approve PNTR simply because it might help ease tensions in Asia. But it is most appropriate to include this consideration in assessing PNTR. And in that light, it is illuminating to look within China and see how various segments of their society view the move toward broader trade relations with the U.S. and others.

The fact is that the hard-liners in the Chinese government and military oppose or are lukewarm, at best, about China joining the WTO and entering into the proposed agreement with the United States. They believe that taking these steps will enhance freedom inside China, and in so doing dilute their power and influence. I think they are right, and that this is one more reason to engage, rather than isolate. After all, the best way to defeat an enemy is not to best him on the field of battle, but to make him your friend. Disapproving PNTR will result in the hard-liners saying, ``See, we told you so, America is hostile to us so we must guard against her.'' We should do what we can to bolster those in China who want to establish friendly relations with the rest of the world, rather than those who believe that might is the only thing that matters.

The Taiwan situation warrants our most careful attention. The war of words between Beijing and Taipei would lead one to think that there was little if any meaningful contact between Taiwan and the mainland. But that is not the case. Already the amount of trade between the robust economy on Taiwan and the mainland is huge, it is growing, and the economic links grow tighter and tighter. Taiwan's
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new leaders, proponents of freedom and capitalism, realize that their relations with the leaders in Beijing can enhance or threaten these economic ties. And they favor PNTR. avoiding past mistakes

As I have studied the situation with China, I have found myself reflecting more and more about mistakes made by the U.S. this century. Almost a century ago, we made a gigantic mistake in not joining the League of Nations, and it helped lead to war with Germany.

A half century ago, we made a gigantic mistake with regard to Cuba. I have concluded that our policies in that situation were seriously mistaken. I believe that if we had resisted imposing the embargo on Cuba, Castro would be history and democracy would be flourishing there as it is in almost every other nation of the western hemisphere. Our effort to isolate Cuba has contributed mightily to keeping its economy from growing. But obviously they did not succeed in bringing about political change. Quite the contrary.

By letting a tiny but vocal minority dictate our Cuba policy, we missed an opportunity to send our message of freedom to the oppressed people there. We have strengthened Castro, unwittingly, and put ourselves in a situation where we have very little real influence on a nation only 90 miles from our shores.

We must not make the same mistakes with a country of 1.3 billion people that we made with a country of 10 million people. China has over 20 percent of the world's population; she is important, even vital, to world peace and prosperity in the decades ahead. conclusion

This agreement includes the strongest anti-surge controls ever legislated. We created the Congressional-Executive Commission on China to oversee every aspect of human rights, including worker rights. We negotiated a provision blocking imports from slave or prison labor. We fought for the creation of a specific inventory of the rights Congress will examine annually on behalf of the Chinese people. This new way of keeping the spotlight on Beijing is crucial, in my view, as we seek to build on the progress of the past.

China must become part of the world community, one way or another, or we will live in a more dangerous world for decades or longer. I think everyone involved in this debate agrees on that central point. The real question is how we can best influence continued change in China. Whatever choice this Congress makes, China will become a member of the WTO and an ever more important player in the global economy. That will inevitably impact on U.S. labor and U.S. business in ways we cannot avoid--only try to shape.

Labels help to shape the debate, of course. We talk about this being a vote on Permanent Normal Trade Relations with China. But is ``permanent'' the right word in a world where little is permanent, where laws can change from year to year? I don't think so. To my mind, the better words to use as a label for this issue would be Continuance of the Normal Trade Relations that have existed for 20 years. After all, this year's vote would simply end what has before been an annual automatic sunset on normal trade relations. But it would hardly prohibit Congress from re-visiting the matter next year or at any time in the future and sunsetting it with an affirmative vote, rather than by automatic operation of law. So those who say this is fraught with danger because of its ``permanency'' are, in my judgment, incorrect.

As I have reviewed this situation, I have frequently thought about the young people of China. A generation ago, Chinese students traveled to Moscow and learned the Russian language and Marxist-Leninist doctrine. Now, the children of these students attend universities in New York City, Chicago, Los Angeles and Buffalo and Rochester.

The collaboration between the school of business at the University of Buffalo and its counterparts in two Chinese universities is a dramatic example. Graduates of those programs are now a successful and influential group of alumni inside China. I have no doubt that China benefits from this educational partnership. But I am also convinced that the United States benefits, too. American faculty and students learn about China while they learn about us. And the messages of capitalism and freedom are spread.

This is but a microcosm of what engagement can mean. Look at what happened in Poland. Americans found ways to interact with people in Poland. Our labor unions supplied Solidarity with computers and vast amounts of assistance and encouragement. No one can know exactly how significant these contacts were in bringing the communist regime down and setting the stage for dismemberment of the old Soviet empire. But what we do know is that they did play a part, and the world is a better place for it.

My vote, Mr. Speaker, is for engagement and against isolation. Our leadership in the world requires it.
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