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An issue that may change the international market significantly is the

[Page: H156]  GPO's PDF

   Overall, China agreed to cut tariffs from an average of 24.6 percent in 1997 to an average of 9.4 percent by the year 2005. For U.S. priority products, tariffs will be cut to 7.1 percent. That is a 62 to 71 percent drop in tariff rates on most imported goods. In addition, China agreed to phase out most import quotas by the year 2005, making these new tariff rates applicable to most products, regardless of quantity.

   China also agreed to give American companies more control of the distribution of their products at both the wholesale and the retail levels. American suppliers will no longer have to go through state trading enterprises or Chinese middlemen. American companies will be allowed to provide maintenance and services for their products, something particularly important, for instance, with automobiles.

   In agriculture, China agreed to lower the average tariff on American agricultural products from nearly 40 percent to 17 percent. In addition, it will set tariffs on U.S. priority products, such as pork, beef and cheese, at 14.5 percent. That is a significant concession.

   The agreement also establishes tariff rate quotas which represent the maximum level of imported product for which lower tariffs are applied. The goal of trade negotiations are to increase those quotas and eventually eliminate them, thus producing the greatest possible benefits for the exporting nation.

   For example, China agreed to eliminate oil seed quotas by the year 2006 and to increase the quota for corn to 7.2 million metric tons by the year 2004. By comparison, China currently imports only 250,000 metric tons of American corn.

   China also agreed to abide by the Phytosanitary Safety Agreement and to accept the U.S. Department of Agriculture certification that American meat and poultry is safe. What this means is that China will now open its market to U.S. pork, beef, and poultry, access which has been denied because of China's claim that American meat is not safe enough for consumption.

   I can guarantee you, America's meat is safe for export. I go overseas to Third World countries. Let me tell you, on most any given day, I would rather have an American piece of meat.

   In addition, China pledged not to provide export subsidies for its agricultural products. Let me repeat that. China pledged not to provide export subsidies for its agricultural products. So they are opening up their market, they are reducing their quotas, they are reducing their tariffs, and they are also agreeing not to subsidize their own producers, giving them an unfair or uncompetitive advantage. These agricultural concessions are very attractive and they hold forth the promise of significant growth for our nation's farmers.

   We passed the Freedom to Farm Bill here a few years ago. I think overall moving away from restrictions on planting and giving farmers freedom to plant the crops that they want is a good move, but part of the bargain of that bill is also that we work hard to remove export barriers and import barriers in other countries. This is part of what we are doing with the accession agreement with China.

   Another component of the agreement of interest to our nation is in the area of financial services. Currently foreign insurance companies are allowed to operate in only two cities in China. This bilateral agreement will remove all geographic limitations for insurance companies within 3 years. Within 5 years, foreign insurers will be able to offer group, health and pension insurance, which represents 85 percent of all premiums sold.

   Foreign firms will be allowed under this agreement 50 percent ownership for life insurance and will be allowed to choose their own joint venture partners. Non-life insurance companies will be allowed to establish local branches, hold 51 percent ownership upon accession, and form wholly-owned subsidiaries within 2 years.

   In addition, China agreed to lower tariffs on American automobiles to 25 percent from the current rate of 80 to 100 percent, and American financing programs for these cars would also be available. Tariffs on information technology like computers and Internet-related equipment would be eliminated by the year 2005 and banks and financial institutions would have unprecedented access to the Chinese population. China promised to conduct business in a fair, non-discriminatory manner, and in accordance with WTO rules.

   The United States also ensured that its existing anti-dumping protection provisions and product safeguard programs will remain in place for the next 12 to 15 years.

   Well, despite the apparent benefits of this agreement, I still think we need to be careful. China does not have a great track record in complying with trade agreements. Currently our trade relationships with China continue to be tilted in favor of China. Despite continued engagement and extension annually of normal trade relations or most-favored-nation status, the U.S. trade deficit with Beijing has increased from $6.2 billion in 1989 to $56.9 billion in 1998.

   In 1992, we signed a memorandum of understanding to improve market access between the United States and China.

[Time: 20:00]

   The Chinese Government has failed to reduce significant trade barriers to U.S. products. In addition, our bilateral agreement is not the final document concerning China's membership in the World Trade Organization.

   China must now complete bilateral agreements with the European Union, with Canada and with other trading partners. These agreements will then be combined into a comprehensive, multilateral package, that would be presented to Congress. Congress must then decide whether to grant China permanent Most Favored Nation status, or normal trade relations .

   A year ago, I opposed a 1-year extension of NTR to China. I did so for several reasons, the unfair balance of our trade relationship; the 40 percent import tariffs that China puts on our agricultural products, I do not think that is fair; China's violations of our national security; their disregard for human rights and their threatening posture towards their neighbors.

   Additionally, I did not feel that past extensions of NTR had greatly benefited America's interests. Rather, despite NTR, China's actions jeopardized our national and economic security. However, this bilateral accession agreement could open a tremendous market for American and Iowan products, if, and this is the big if, China actually complies with the provisions of the treaty.

   The unprecedented access for international businesses would expose Chinese society to outside influences like never before. While the jury is still out, the fine print has not yet been made available for review, I expect the President will request Congress to waive the Jackson-Vanick amendment which requires annual extension of NTR for China and ask us to improve permanent NTR status.

   This is going to lead to a vigorous and energetic debate on this floor of the House of Representatives. The stakes are very high. This may sound like an arcane subject. Maybe it is not as personal as the patient protection legislation that I am going to be talking about in a few minutes, but I can say what we decide on the floor of this Congress on this treaty could have significant impact on each and every one of us in this country in terms of how our economy is going to do.

   If Congress approves permanent normal trade relations for China and abandons the annual review requirement, do we risk losing valuable leverage in future negotiations? If we grant permanent NTR, will we actually experience significant reform in the Chinese markets, or will China renege on its promises as it has in the past?

   If we do not grant permanent normal trade relations , will we be watching from the sidelines as other nations take advantage of new market opportunities to 1 billion people? These are some of the questions that Congress will have to ask this session. I look forward to the debate, and I am learning more about the fine print of this agreement.

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   In summary, I think the United States must pursue free trade whenever possible. This includes reforming our sanctions policies to provide American food and medicine to needy civilians. It involves granting the President fast track negotiating authority to ensure our place in global trade negotiations. It involves participating in international trade organizations to open new and expanding markets. It involves reducing trade barriers in order to spur further economic growth for our economy, but we must remain aware of the implications such action may have on our security, and we must make those decisions appropriately.

   At this time, I am leaning towards a yes vote on permanent normal trade relations with China, and I am looking forward to the debate.

   PATIENT PROTECTION LEGISLATION

   Mr. GANSKE. Mr. Speaker, I want to say a few words about patient protection legislation, particularly in response to what I consider to be a rather inaccurate publication that has been sent to Congress, all Members of Congress recently, by the HMO industry.

   Before I go any further, I want to be crystal clear what my position has been throughout this long debate. As we have developed patient protection legislation, I have always believed that any entity, whether a doctor, a health plan or a business, that makes decisions on medical necessity must be held responsible for those decisions. Moreover, I find it reprehensible that there are those who would promote the argument that an entity should be able to wrongfully cause the death of a patient and be shielded from legal responsibility.

   Currently, doctors are held responsible for the medical decisions they make, but health plans and even employers can dodge such responsibility through the ERISA preemption clause. Recognizing that plan sponsors and some employers do make these decisions, the Norwood-Dingell-Ganske bill, the Bipartisan Consensus Managed Care Improvement Act of 1999, erases this unintended shield by making those plans responsible for any decision they make regarding medical necessity.

   Of those lawsuits that are brought, most would not be against employers or plan sponsors because they are generally not involved in the medical necessity decisions that could lead to a personal injury or death. Therefore, our bill protects health plans and employers by ensuring that they can only be sued if they decide to do more than offer health insurance. In a recent communication entitled Health Plan Liability, What You Need to Know, the American Association of Health Plans makes a number of dubious assertions about the Norwood-Dingell-Ganske Bipartisan Consensus Managed Care Improvement Act of 1999. I would advise my colleagues to take this with a grain of salt. In fact, my colleagues may want to take it with a whole truckload of salt that is currently cruising the streets here in Washington.

   To begin with, the AAHP implies that supporters of the Norwood-Dingell-Ganske bill are promoting lawsuits, but the supporters of the Norwood-Dingell-Ganske bill believe that patients should have an opportunity to pursue internal and external review in a timely fashion before they are harmed. It is the appeals process with an independent review panel that will improve quality of care and ensure that patients receive necessary health care, but as Governor Bush says, ``at the end of the day, HMOs must be responsible for their actions.''

   Then AAHP claims that HMOs already can be sued under ERISA. Well, again, take that characterization with a huge grain of salt, because it is true that under ERISA HMOs can be sued but only for the costs of treatment denied. Now, how is that a just outcome for a child that has already lost his hands and his feet or somebody else who has lost their life? It is a travesty that many of these people and their families find that their legal remedy, under ERISA, through their employer plan, for their loss, is only the cost of treatment denied.

   That is an unfair burden on patients. It was never the congressional intent and the Norwood-Dingell-Ganske bill provides appropriate liability and external appeals process protections for patients and their families.

   Next, the American Association of Health Plan little manual says, ``The current medical malpractice system demonstrates that making correct decisions does not preclude lawsuits,'' but under the Norwood-Dingell-Ganske bill the external appeals panel makes a determination on the appeals that are brought before it. If the health plan does not abide by the panel's decision, then the patient and his family have the ability to pursue liability action. However, if the plan abides by the independent panel's decision, then it is protected under our bill, the bill that passed this House by a vote of 275 to 151, it is protected from the punitive damages that the health plans are so concerned about.

   On this point, an additional claim that our bill, ``requires external review to be completed in all cases before an individual can sue the plan. Therefore, few claims will ever reach court,'' AAHP then states that the Norwood-Dingell-Ganske bill would, ``allow enrollees to bypass external review when an enrollee claims that he or she had been harmed before an external review is initiated.''

   AAHP fails to point out that the Norwood-Dingell-Ganske bill allows them to go directly to State court only, I repeat only, if they have suffered personal injury or wrongful death. After a patient has already been killed, seeking any further treatment or an appeal is absurd. On external review AAHP says that we say, ``expanded health plan liability is necessary because plans may not adhere to the decisions of the external review even at this time.''

   AAHP states that, ``There is no evidence

   demonstrating that in States that have a binding external review system, health plans do not adhere to the decision of external review entities.''

   However, in the House Committee on Commerce, we heard testimony from Texas that refutes this statement by the HMO industry. That lawsuit, Plocica versus NYLCare is a case in which the managed care plan in Texas did not obey the law, and a man died. This case exemplifies why we need accountability at the end of the review process.

   Mr. Plocica was discharged from a hospital suffering from severe clinical depression. His treating psychiatrist informed the plan that he was suicidal and required continued hospitalization until he could be stabilized. Texas law requires an expedited review by an independent review organization, one of those IROs that Governor Bush speaks about. Prior to discharge, such a review was not offered to the family by the plan, by the HMO.

   Mr. Plocica's wife took him home. During the night he went to his garage. He drank half a gallon of antifreeze and he died a horrible, painful death.

   This case shows that external review and liability go hand in hand. Without the threat of legal accountability, HMO abuses like those that happened to Mr. Plocica will go unchecked.

   The lesson from Texas also is that there will not be an avalanche of lawsuits. In fact, when HMOs know that they will be held accountable, there will be fewer tragedies like those that happened to Mr. Plocica.

   A couple of Sundays ago, just before the Iowa caucuses, AARP, the American Association of Retired Persons, ran a one-hour infomercial on TV. They interviewed all of the Presidential candidates on their positions on a number of issues interesting and of importance to senior citizens. One of the questions that they asked was, what is your opinion on patient protection legislation? And they had quotes from all of the candidates, both Republicans and Democrats.

   I want to read a transcript of what Texas Governor George W. Bush had to say about this issue. These are Governor Bush's words. ``As governor of Texas, I have led the way in providing for patient protection laws when it comes to managed care programs. I am proud to report that our State is on the leading edge of reform. People who are in managed care programs in the State of Texas have the right to choose their own doctor so long as it does not run up someone else's premium. People in my State are able to take advantage of emergency room needs and yet be covered by managed care. Women have direct access to OBGYNs. Doctors are not subject to gag rules.''

   Governor Bush continued. ``We have information systems now that are made available for consumers who are in managed care programs. We have

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   Governor Bush continued. ``I have also allowed a piece of legislation to become law that allows for people to take disputes with managed care companies to an objective arbitration panel called an independent review organization.''

[Time: 20:15]

   ``It is a chance for the insurance provider and for consumers to resolve any disputes that may arise.''

   Here is the important part of this statement. These are in Governor Bush's words. This is from the Texas experience.

   ``If after the arbitration panel makes a decision, and if the HMO ignores that decision, i.e., in this gentleman's case where he drank half a gallon of antifreeze case and died because of that HMO's medical necessity decision, then consumers in the State of Texas will be able to take the HMO to a court of law to be able to adjudicate their dispute.''

   George Bush finished his statement by saying, ``I believe this brings accountability to HMOs, and I know it gives consumers the opportunity to take their case to an objective panel. This law is good for Texas. I believe this law will be good law for America, as well.''

   Mr. Speaker, the bill that we passed here a few months ago, the Bipartisan Managed Care Consensus Reform Act of 1999, the Norwood-Dingell-Ganske Act, was modeled after the Texas laws. Let me give some examples.

   The Norwood-Dingell proposal on utilization review, when a plan is reviewing the medical decisions of its practitioners, it should do so in a fair and rational manner. The bipartisan consensus bill lays out basic criteria for good utilization review: physician participation in development of review criteria, administration by appropriately qualified professionals, timely decisions. All of these things, and the ability to appeal those decisions, are in the Norwood-Dingell bill.

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