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Agriculture
Secretary Dan Glickman addressed hundreds of growers and their
families during the General Session at the 2000 Commodity
Classic in Orlando, Fla. The Secretary told the crowd that he
would be returning to Washington that day for an important
meeting about efforts to pass Permanent Normal Trade Relations
(PNTR) and ease China's accession to the World Trade
Organization.
"I want to spend a
minute talking about this because I believe it is the most
important trade issue facing the agriculture community this
year," Glickman said. "And furthermore, it's an issue that has
implications beyond agriculture, and even beyond just trade
and commerce."
| Secretary of Agriculture Dan Glickman outlined
for producers the importance of Permanent Normal Trade
Relations with China during the General Session at
Commodity Classic. |
 |
"Agriculture is
very dependent on exports, more than twice as dependent, in
fact, than the overall economy. And no nation offers more
export potential—and has delivered fewer results—than China.
We're talking about the world's largest country, home to one
out of every five people on earth, with an economy growing at
7 percent a year. Yet last fiscal year, every man, woman and
child in China consumed less than one dollar's worth of
American agricultural goods. In one year, less than a dollar a
person.
"But by joining the
WTO, China would agree to open its market to us as never
before. They would cut tariffs dramatically, to a point lower
than many of those levied by our traditional trading partners.
Florida oranges, for example, would face only a 12 percent
tariff, as opposed to the current 40 percent. China would bind
the tariffs on soybeans and soybean meal at 3 and 5 percent
respectively. We expect that trade in soybean oil would be
completely liberalized by 2006. And a new tariff-rate quota
would allow Chinese corn imports of up to 7.2 million metric
tons at a mere 1 percent duty by 2004.
"On the non-tariff
side, China would eliminate export subsidies, cap and reduce
trade-distorting domestic support, lift trade barriers that
couch protectionism in scientifically questionable health
standards, and allow business to be done between private
individuals without the interference of State Trading
Enterprises. And, of course, China would agree to accept the
authority of a rules-based multilateral trading
system.
"We'll be right
there to ensure that China honors its commitments. Passing
PNTR does not mean going soft on China and just assuming that
they'll live up to their obligations. Quite the contrary. The
Administration intends to be vigilant about monitoring China's
progress and enforcing the terms of the accession
deal.
"When it's all said
and done, we estimate conservatively that China's accession to
the WTO will mean an additional $2 billion a year in total
U.S. farm exports to China by 2005. China will go from being a
net corn exporter to a net corn importer before the decade is
out, and there's every reason to believe that American farmers
will get a healthy share of that business. What's more, fewer
Chinese corn exports will mean less competition for us in
other Asian markets like Korea and Japan. It's the same story
in soybeans, as WTO accession figures to increase average
annual Chinese soy complex imports by $171 million dollars
during the next ten years.
"This deal is
really a no-brainer. The first question most Americans ask
when our trade negotiators bring home a new agreement is:
"What did we give up?" Well, the answer in this case is,
"absolutely nothing." Because our market is already open to
the Chinese, as evidenced by our current 5-to-1 trade deficit
with them. This is not like NAFTA, where we had to give in
order to get. In this case, all the concessions are on their
side, and all the benefits are on ours. We've got nothing to
lose by passing PNTR and bringing China into the
WTO.
"Perhaps more
importantly, we've got everything to lose by rejecting it.
American farmers and workers would lose the benefits of
increased exports to China, while China's WTO concessions
would be extended to our competitors. The European Union,
Canada, Brazil, Japan, Australia and others would eat our
lunch. They'd be more than happy to fill the orders that we
lose, and it would take us years to regain any kind of
foothold in China.
"Now, there are
some who object to PNTR and the WTO agreement because they're
concerned about China's human rights violations, or their lax
labor standards, or their aggressive posture toward Taiwan. We
share these concerns, and we're addressing them through
appropriate channels. But in the long run, the surefire way to
ensure that China does not change is to walk away from this
bilateral relationship. If we want to open China, if we want
to expose China to our values—to democratic principles, to the
concept of religious freedom—then we have to bring them into a
rules-based global system. If we help China become a more open
economy, eventually they will become a more open
society.
"As important as it
is to boost exports, there's more at stake here than dollars
and cents. We cannot continue to be the world's only
superpower if we disengage from China at precisely the moment
that it stands on the precipice of wholesale political,
economic and social reform.
"Let's remember
also that China has access to weapons of mass destruction,
that China holds the key to peace and stability in Asia. We
simply cannot afford to isolate such a regional and emerging
global power from the world's trading system. For our national
security as well as our economic security, we have to engage
China." | 
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