Daley on China PNTR to World Economic Forum

(Failing to grant China PNTR would have major consequences) (1600)

Failing to grant China Permanent Normal Trade Relations (PNTR) status and membership in the World Trade Organization (WTO) would have major consequences for the United States, U.S. Secretary of Commerce William Daley said in May 23 remarks in Washington, D.C. to the World Economic Forum.

China "is a market that next year will be the second largest in the world for personal computers. This is a market that adds the equivalent of a new 'Baby Bell' every year. Right now, every man, woman, and child in China eats just a dollar's worth of American farm products -- a year," Daley said. "If Congress votes this (PNTR) down, it will be the European and Asian farmers who benefit when the market opens -- not our farmers."

Withholding PNTR from China could also hamper reform efforts in China, according to Daley.

"If Congress votes this down, they would be going against China's reform-minded politicians and many of the groups involved in missionary work there, who are in favor of this. Instead, they'd be playing right into the hands of China's People's Liberation Army and hard-line politicians who oppose entry into WTO," he said.

A vote against PNTR "will not address the legitimate concerns people have about the dark sides of China that no one likes," Daley said.

Daley pointed out that a vote against PNTR would leave China with less access to outside information and "restrict contact with the democratic world" at a time when "the cyberworld has brought great change to our society, and could do the same for China."

"If our high-tech industry goes in and wires China, and everybody is connected to the Internet, change will come more rapidly in ways no one can control," he said.

"When we export to China, we're not just selling a product or a service, we're selling a way of life, a democratic way of doing things," he said.

Following is the text of Daley's remarks, as prepared for delivery:

(begin text)

REMARKS BY

COMMERCE SECRETARY WILLIAM DALEY

WORLD ECONOMIC FORUM

WASHINGTON, D.C.

MAY 23, 2000

Klaus Schwab left out one little fact in that very kind introduction: I am now the longest serving Commerce Secretary in this century -- all of 144 days.

The longest serving in the last century -- was Herbert Hoover. He went on to be President, and I just want to leave Washington without having to a hire a lawyer.

The last time we met, Klaus, was in Davos, in late January. President Clinton was there, too. And he gave a very passionate speech about the virtues of free trade, of making the WTO more credible and accountable, and of the importance to America and the rest of the world of normalizing trade relations with China. And here we are four months later, talking about those same issues, on the eve of a very historic vote on China in the U.S. Congress.

Obviously, it has been a very long four months. We have worked very hard to get here. At this point in the game, no doubt you have heard just about everything there is to say about China. So, I will give a short speech today.

Let me cut right to the chase. Despite the progress we have seen over the last week -- picking up votes and Europe and Australia striking deals with China -- we still do not have the 218 votes yet to win it -- and the opposition does not have the votes to kill it. We will not know for sure until Speaker Hastert bangs the gavel -- and the last member, casts the last vote, for the last time.

And if anyone says they know today who's going to win, I can sell them an old Chicago Tribune that screams: "Dewey Defeats Truman."

The worst mistake we could make is to underestimate the opposition. Organized labor is serious about this, and they are running an incredibly good campaign. They have applied pressure where it is most effective -- not in Washington, but in the districts, where the normal people live.

Their efforts have had an enormous impact. In my home state of Illinois, there are 10 House Democrats, and probably everyone will vote against this, because many of their constituents fear change and fear globalization. In the end, I am optimistic we will pull it out. In my opinion, what will shift the balance to our side is a proposal for a watchdog commission by Reps. Levin and Bereuter, and protections to guard against import surges. Without these, chances are PNTR will not pass tomorrow.

Members are not questioning the economics of the deal. But they are questioning China's mixed record on human rights, and labor conditions, and rule of law. This commission will take care of the substantive concerns most people have. And from a political view, it broadens the base of support for the vote.

Let me say, I hope our friends in China will come to understand this. I hope they don't think that just because the president and the business community are for this, that it's a done deal. Democracies don't work that way. Everyone has a voice. The fact is, there is a lot of anxiety about globalization, and this vote on China has become a target for these fears.

We elect members to make the tough choices. For selfish reasons it would be easier for them to say no, or to say let's wait until after the election. I am not an alarmist. I will not tell members voting no could bring the United States to its knees. But if this thing fails, there will be major consequences.

We'll watch Japan and Europe take advantage of the economic opportunities of opening a market of more than a billion consumers. This is a market that next year will be the second largest in the world for personal computers. This is a market that adds the equivalent of a new Baby Bell every year. Right now, every man, woman, and child in China eats just a dollar's worth of American farm products -- a year. And if Congress votes this down, it will be the European and Asian farmers who benefit when the market opens -- not our farmers.

A vote against this will not address the legitimate concerns people have about the dark sides of China that no one likes. Because the fact is, when we export to China, we're not just selling a product or a service, we're selling a way of life, a democratic way of doing things.

Some say China would block progress in the WTO on environmental issues. Like some of you, I was in Seattle. I can tell you, first hand, environmental issues -- like labor issues --- are already a hard sell. And that won't change much when China joins.

If Congress votes this down, they would be going against China's reform-minded politicians and many of the groups involved in missionary work there, who are in favor of this. Instead, they'd be playing right into the hands of China's People's Liberation Army and hard-line politicians who oppose entry into WTO.

A vote against this would leave China with less access to outside information. It would restrict contact with the democratic world. Ironically, it would do it as the cyberworld has brought great change to our society, and could do the same for China. If our high-tech industry goes in and wires China, and everybody is connected to the Internet, change will come more rapidly in ways no one can control.

For America to turn this down, especially after Seattle, it would send the wrong signal. Here we have a country, with one-fifth of humanity, that wants to enter a rules based organization -- rules that we created -- and we're thinking of turning them away? Here we are, an economy 10 times larger than China's; here we are, with exports to the world four times greater than China -- and we're thinking about turning China down? We're afraid to make permanent trade status that we have granted every year for almost two decades?

Every president, every living secretary of state, every living commerce secretary -- no matter what party -- is for this. The two main candidates running for president -- Vice President Gore and Gov. Bush support it. Almost all of the 50 governors support it. Even Fed Chairman Alan Greenspan, who is usually very circumspect, is very clearly in favor of PNTR. I know deep down, many members want to vote yes. They know it is the right thing to do.

But as I said earlier, their constituents have very real concerns about trade and globalization. And these aren't fringe groups we're hearing from.

If we are lucky enough to win tomorrow, it's no time to bring out the champagne. It's time to stop the fighting, and accept that globalization is a fact of life. It's time for business to go beyond thinking about how many widgets to sell, and thinking more about what the people are saying. As President Clinton told you in Davos, it's time the global business community and labor created a shared vision, so that 20 years from now businesses and citizens are both better off.

Thank you very much.

(end text)

(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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