February 16, 2000

(Washington, D.C.) –  International Brotherhood of Teamsters Western Region Vice President Chuck Mack today took the concerns of American working families to the U.S. House of Representatives. Testifying before a House Ways and Means Committee hearing on China, Mack expressed grave concerns over the U.S. proposal to grant permanent Normal Trade Relations (NTR) status to Communist China.

“If permanent NTR is granted, the U.S. will have put a seal of approval on one of the most brutally repressive regimes in the world,” said Mack.  “We will be turning our back on China’s democracy movement, on the thousands of people who have fought, and in many cases died, for freedom in that nation.”

“As democracy activists Harry Wu and Wei Jingsheng have often stated, increased trade that is not linked to human rights merely enriches the regime and the vast network of enterprises it controls, increasing its stranglehold on the Chinese people,” Mack continued.

The Teamsters Union believes that Communist China should not be rewarded for its heinous record of human rights abuses, use of forced labor, and violations of past trade agreement by granting it permanent NTR status.

“Please understand the Teamsters Union is not anti-trade.  In fact, we support trade that benefits people,” Mack added.  “We think American workers should face fair competition, not competition based on a race to the bottom.  Fair trade – not free trade.”

The International Brotherhood of Teamsters represent more than 1.4 million working men and women throughout the United States, Canada, and Puerto Rico.

SUBMITTED STATEMENT OF

THE INTERNATIONAL BROTHERHOOD OF TEAMSTERS

COMMITTEE ON WAYS AND MEANS

U.S. HOUSE OF REPRESENTATIVES

Washington, D.C.

February 16, 2000

The U.S.-China Bilateral Trade Agreement and China’s Accession to the WTO

Mr. Chairman, Mr. Rangel, and members of the Committee, the International Brotherhood of Teamsters is pleased to submit the following statement on behalf of our 1.4 million members.

Last fall, prior to the Seattle WTO Ministerial, the Clinton Administration announced that it had reached a trade deal with Communist China that will ease its accession to the World Trade Organization (WTO) and grant it permanent Normal Trade Relations (NTR) status.  The Administration and its business allies claim that this agreement will benefit the U.S.  But the Teamsters Union is here today to tell you that that isn’t true!  This deal will hurt the U.S.  Moreover, it will hurt American workers and their counterparts in China and instead will benefit large, multinational corporations that seek to maximize profits no matter what the costs are to workers and the communities in which they live.

Since 1980, the U.S. has gone from enjoying a small trade surplus with China to suffering an enormous $60 billion trade deficit.  The deficit has doubled in the last few years alone, as the Clinton Administration has opened the U.S. market to more Chinese exports under the “constructive engagement policy” which ignores both human rights and worker rights considerations.  Our trade deficit with China cannot be blamed solely on the influx of cheap imports like shoes and toys.  The U.S. also sustains a trade deficit with China in the hi-tech computer and electronics sectors, which in the case of the former increased by more than 100% between 1996 and 1998.  To put these trade numbers in perspective, the U.S. trade deficit with China is second only to our imbalance with Japan.  And for all the hoopla about our exports to China the fact that these exports make up a miniscule portion of the U.S. total – we export less to China than to Belgium.  This deal will only lead to further increases in this job destroying trade deficit.

Congress and this Administration must understand that the basic problem is that our trade policy with China forces us to compete with goods made by workers whose rights are violated on a daily basis.  Workers in China do not enjoy even the most basic workplace safety protections.  Forced labor is rampant, with some seven million Chinese toiling away in prison labor camps, the vast majority serving sentences for such political “crimes” as criticizing the Communist government.  To try to organize a union in China is to commit a crime against the state.  That is why China’s workers, despite their relatively high skill levels, earn some of the lowest wages in the world.  That is why American manufacturers like General Electric are so eager to move production to China.  Why pay a living wage when starvation wages will do?  Why pay the cost of maintaining a safe workplace when the government doesn’t care if you do or not?

          So let’s talk about General Electric for a moment.  In October 1993 – during the NAFTA debate – its representative testified before the House Committee on Foreign Affairs that sales to Mexico “could support 10,000 jobs for General Electric and its suppliers…. these jobs depend on the success of this agreement.”  Unfortunately, General Electric through its subsequent deeds, has swayed from those promises.

          The fact is that since NAFTA was enacted more than 3,500 employees at General Electric have lost their jobs and in each case the Department of Labor ruled that those job losses were the result of either a shift in production across the border or increased company imports from Mexico.

          To make matters worse, General Electric has embarked on a personal crusade to strong-arm its suppliers to pile on to this NAFTA-sanctioned march across the Rio Grande.  A recent Business Week article outlines this concerted effort to move American jobs to Mexico, noting that the number of workers employed by General Electric in the U.S. has fallen by half over the past 15 years.  In that same time period, the number of foreign workers has doubled – all in the name of increased profits.

          And profit they have!  While orchestrating the plight of thousands of American working families, the corporation has realized tremendous financial gains.  Since the passage of NAFTA, General Electric stock has risen from under $100 a share to over $130 a share, twice undergoing a 2-for-1 split.   In 1998 alone, its CEO, John Welch, received more than $37 million in salary, bonuses and other compensation.  If you factor in stock option grants, his take that year soars to more than $62 million, making him one of the highest paid CEO’s in America.  This makes this Union wonder whether General Electric is more concerned with bringing in big bucks for its shareholders and executives than it is with “bringing good things to life.”

          Regardless, the pattern here is clear.  Corporate America has learned that it can coerce Congress and the American people into passing new free trade agreements so long as it promises to create new jobs.  It is then free to use those same trade agreements to ship good American jobs overseas in order to avoid important labor and environmental standards and exploit low-wage, underprivileged workers.  And when that’s not enough, Corporate America comes back for more – this time, China’s accession to the WTO.

Fortunately, the American people don’t have to wait for the outcome of the U.S.-China deal to see how General Electric intends to behave.  In one breath it promises that free trade with China will heap tremendous benefits upon our workers, our farmers, and our children.  And in the other, its President of Medical Systems, Chih Chen, announces the transfer of General Electrics’ research, development and manufacturing centers from the U.S. to Japan and Beijing.  In addition, General Electric has announced that it will embark on three ventures in China, including construction of a $30 million facility in Shanghai.

What disturbs the Teamsters Union most is that General Electric would be so cavalier to declare its intention to move as an “effort to search out and attract the unlimited pool of talent that is available in the countries in which we do business,” while pointing to China as a target of that effort.  Someone should inform General Electric that there is another country that not only has an “unlimited pool of talent,” but also ensures workers’ and human rights, guarantees free speech, and protects individual liberty:  the United States.

 Please understand the Teamsters Union is not anti-trade.  In fact, we support trade that benefits people.  We think American workers should face fair competition, not competition based on a race to the bottom:  Fair trade – not free trade.  But how can we trade with China when even China, much less multinational corporations, can’t be trusted to keep its promises and to trade on fair and equitable terms. 

The fact is that since the U.S. began conferring MFN, now NTR, benefits on China in 1980, it has violated every single bilateral agreement it has entered into with the U.S.  Some examples:  After signing three agreements on intellectual property with the U.S. in four years, China continued to commit massive copyright infringement of U.S. products, leading to the completion of yet a fourth agreement in April 1999.  As noted in recent news reports, even as China eliminates barriers in some sectors of the economy, it erects them in others – in clear violation of the U.S. China Market Access Agreement.  It recently imposed duties on chemicals, motor vehicles and other U.S. exports, imposed a total ban on foreign diesel and gasoline, and prohibited the use of foreign equipment to construct new power plants.  The Chinese Ministry of Foreign Trade and Economic Cooperation (MOFTEC) publicly advertised its strategy to invest in Africa to circumvent U.S. quotas on textiles and apparel.  And the Department of Commerce recently found that China continues to force U.S. joint ventures to transfer valuable commercial technology to China in exchange for market access.

Already, top Chinese officials are openly advertising the regime’s intention to disregard the commitments it made to the U.S. in its deal to join the WTO. 

If we then extend permanent NTR to China, which guarantees permanent access to the U.S. market, we will be sending a message that no matter what promises China has failed to fulfill, there will be no consequences in terms of trade with America.  Moreover, if permanent NTR is granted, the U.S. will have put a seal of approval on one of the most brutally repressive regimes in the world.  We will be turning our back on China’s democracy movement, on the thousands of people who have fought and in many cases died for freedom in that nation.  As democracy activists Harry Wu and Wei Jingsheng have often stated, increased trade that is not linked to human rights merely enriches the regime and the vast network of enterprises it controls, increasing its stranglehold on the Chinese people. 

A no strings attached deal for permanent NTR would be a disaster for people in China and the U.S.  The only beneficiaries will be the Chinese dictatorship and those unscrupulous corporations like General Electric who are eager to exploit China’s repressed labor force and happy to do business with its dictators.