China, the WTO (World Trade Organization), and the Future of U.S.-China Relations , Brookings Institutio

Baucus, Max S.

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University of MontanaScholarWorks at University of MontanaMax S. Baucus Speeches Archives and Special Collections3-27-2000"China, the WTO (World Trade Organization),and the Future of U.S.-China Relations", BrookingsInstitutionMax S. BaucusLet us know how access to this document benefits you.Follow this and additional works at: https://scholarworks.umt.edu/baucus_speechesThis Speech is brought to you for free and open access by the Archives and Special Collections at ScholarWorks at University of Montana. It has beenaccepted for inclusion in Max S. Baucus Speeches by an authorized administrator of ScholarWorks at University of Montana. For more information,please contact scholarworks@mso.umt.edu.Recommended CitationBaucus, Max S., ""China, the WTO (World Trade Organization), and the Future of U.S.-China Relations", Brookings Institution"(March 27, 2000). Max S. Baucus Speeches. 692.https://scholarworks.umt.edu/baucus_speeches/692Printing, Graphics & Direct MailONBASE SYSTEMIndexing FormSenator * or Department*: BAUCUSInstructions:Prepare one form for insertion at the beginning of each record series.Prepare and insert additional forms at points that you want to index.For example: at the beginning of a new folder, briefing book, topic, project, or date sequence.Record Type*: Speeches & RemarksMONTH/YEAR of Records*: March-2000(Example: JANUARY-2003)(1) Subject*: Trade(select subject from controlled vocabulary, if your office has one)(2) Subject* China, the WTO, and the Future of US / China RelationsDOCUMENT DATE*: 03/27/2000(Example: 01/12/1966)* "required information"PRINTSenator Max Baucus"China, the WTO, and the Future of US/China Relations"The Brookings InstitutionWashington, D.C.March 27, 2000I want to thank Bates Gill for arranging this opportunity for me to talk about US/Chinarelations. Bates is one of this nation's premier China scholars, and I look forward toworking together with him for many years to come.With Taiwan's Presidential election now behind us, this is a good time to think about thecomplex triangular relationship among Washington, Beijing, and Taipei. The WTO,PNTR, Taiwan security, democracy in Taiwan, cross-Strait dialogue, generationalchange in China's leadership. All of these are inter-related. As I think about thechallenges facing Taiwan President-elect Chen Shui-bian, they are enormous: aplurality victory by the Democratic Progressive Party which itself has serious internalideological and policy divisions; a Kuomintang that lost the Presidency but still controlsthe Legislative Yuan as well as many local political positions and a huge businessinfrastructure; an outgoing President Lee Teng-hui with an uncertain future. And thoseare only the internal challenges.Professor Li Cheng of Hamilton College has written about generational change inChina's leadership. He concludes that China's fourth generation leadership, those whoare in their late 40s and 50s today, areless dogmatic ideologically and more open-minded than their predecessorsless confrontational and more compromising because of what they witnessed inthe Cultural Revolutionmore technocratic in approach because of their educational background which isoften in law and the economymore likely to emphasize the importance of economic might and the role ofscience and technology in the information age.Li says that they are angry about the moral superiority and arrogance of the West andsuspicious about whether a Western economic and political system could work inChina. He concludes that we are in for greater changes as a more diversified,energetic, aggressive, and less dogmatic generation comes into power in China.A big question, of course, is how this new generation of Chinese leaders will deal withTaiwan and, in particular, a Taiwan that has just seen the party in power change for thefirst time.That said, let me talk aboct t situation across iV- Taiwan Strait. On February 21,Beijing issued a very tre !h te Paper that ',-d time and the possible use offorce for reunification. . - .. . at action, combined with out-is inappropriate. We should consider PNTR on its own merits, as a trade measure, andevaluate the benefits to our economy.When I was in college, I spent a year hitch-hiking around the world. That experiencehelped me find a direction in my career and my life. One lesson I learned was thathuman and economic interchange is one of the best ways to influence a nation'sbehavior. Nothing I have seen since has changed that view.After half a century, the Kuomintang will give up executive power following Taiwan'sopen and honest democratic election. This is being done by a political party whosehistory is steeped in decades of severe authoritarianism. Korea now has its seconddemocratically elected President, also after decades of strict authoritarian regimes.The information revolution, along with economic interchange, can have a profoundimpact on a society and its people. Tom Friedman's "Golden Arches Theory of ConflictPrevention" states that when a country reaches the level of economic developmentwhere it has a middle class big enough to support a McDonald's network, people don'twant to fight wars anymore. His point is that economic growth and the development ofa middle class lead to a completely new set of demands on a government and on asociety ---for.information, for accountability, for responsibility, for participation, forfreedom. There is no reason to think that the Chinese people, despite millennia ofimperial rule followed by half a century under communism, will be any different in thisregard than Russians, or Georgians, or Koreans.There are already some signs of this in China. Of course, those interested inmaintaining the status quo, in protecting State-Owned Enterprises, in pursuing astronger military, in keeping their perquisites, are still powerful. But, talk to an Internetentrepreneur in Beijing. Talk to the owner of a new restaurant. Talk to someone whohas a small company. A major motivation is to raise income and improve the quality oflife. But it is also about greater choice, greater freedom of action and thought, andgreater control over their own future.In a speech a few months ago, Bates Gill said that you can't be disillusioned aboutChina if you don't have illusions in the first place. I have watched China closely for along time and have concluded that engagement with no illusions and engagement witha purpose should be a watchword for US/China relations.I have been active on the issue of most-favored nation status, MFN, now NTR orNormal Trade Relations, for China, for over a decade. I have led the fight in Congressto extend NTR status every year without conditions. Recall that there were negotiationson Chinese accession to the GATT in the late 1980s. They came to a full stop with theJune, 1989, massacre in Tiananmen square. Some in Congress and in the humanrights community then concluded that the annual waiver process for MFN, which was3China PNTR status, that is, if we don't treat them the same as we treat all other WTOmembers, we will not be able to benefit from most of China's concessions. That meansthat our Japanese and European competitors would'have full access to China'smarkets while we would be left outside.As I speak to audiences in Washington and around the country, I have been surprisedby how few people understand this. Many believe that the issue is whether the UnitedStates will allow China to join the WTO. To repeat, China will, most assuredly, becomea WTO member this year. The issue is whether American farmers, workers, andbusinesses will gain. If you listen to most opponents of PNTR, they are really arguingthat China should not be allowed to join the WTO. Specifically, what are they saying?One, PNTR is a gift to China.The fact is that China commits to open its market in unprecedented ways, while theUnited States gives up nothing - no change in our trade laws, no change in our traderegulations, no increase in China's market access to the United States.Two, PNTR will reward China's oppressive behavior.Martin Lee, Chairman of Hong Kong's Democratic Party, who has fought relentlessly forfreedom and democracy in Hong Kong, believes that China's entry into the WTO wouldstrengthen those in China who want to embrace the rule of law. Opening China furtherto international trade and foreign influence will reinforce positive trends in China thatencouragethe country to look outward. Information technology liberalization meansgreater access to the Internet, access to cellular phones, access to Palm Pilots.Remembearthat dissidents in the former Soviet Union wanted the West to send them faxmachines, not machine guns.Three, PNTR means we lose our leverage over China's behavior on human rights andTaiwan.We are not giving up leverage by abandoning the yearly NTR review. If we look backover the last decade of US-China relations, it is clear that we have never been able touse the MFN or NTR debate as leverage. Why would we think that it would be effectivein the future when it has failed for a decade to stimulate change in China? Votingagainst PNTR won't free a single prisoner. Voting against PNTR won't reduce Chinesethreats'against Taiwan. But voting against PNTR will empower the most rigid anti-democratic elements in the Chinese government. Voting against PNTR will leave theChinese people with less contact with the most democratic elements in the West. Andvoting against PNTR is a vote against the reform elements in China's leadership today.Four, China's record on human rights got worse in 1999, so they don't deserve PNTR..5It is one thing to negotiate a great trade agreement. But even more effort is neededafter it is signed to make sure that it works and that there are concrete commercialresults. When our government takes this issue seriously, as it did in the case of theintellectual property rights agreement with China, and puts the right resources intoensuring compliance, it is successful.There is a lot of concern in the Congress and in the business community about Chinesecompliance with its trade agreements, and I share that worry. That is why I recentlyintroduced the China VVTO Compliance Act which will force future Administrations,whether Democrat or Republican, to monitor Chinese commitments and take strongaction to ensure compliance. It also provides for institution building in China that willhelp create the infrastructure necessary to comply with VVTO commitments. I hope thatthis bill will be enacted as part of the PNTR approval process.I am optimistic that PNTR will pass this year. We have the votes in the Senate. Giventhe strong commitment of President Clinton, Vice President Gore's statement twoweeks ago that he will actively promote PNTR, the increasing activity by the businessand agriculture communities, and the fact that this is, simply, a very, very good deal, Ibelieve the House will also approve it. The direct trade benefits are obvious. The costsof rejecting PNTR are enormous. We need to consider PNTR on its own merits,examine the impact on the American economy, and then approve it, without lettingpolitical issues determine the outcome.7

China, the WTO (World Trade Organization), and the Future of U.S.-China Relations , Brookings Institution

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China, the WTO (World Trade Organization), and the Future of U.S.-China Relations , Brookings Institution

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