Statement by Senator Dianne Feinstein on the Senate Approving
Permanent Normal Trading Relations Status to China
September 19, 2000

“Today, the Senate passed what I believe is the single most important piece of foreign policy legislation during this Congress – granting Permanent Normal Trading Relations to China. China has Normal Trade Relations now, subject to annual review. This will make it permanent.

In the bilateral agreement reached last fall, China made significant concessions across virtually every economic sector and committed to decrease tariffs:

• on U.S. agricultural products, such as citrus, wheat, corn, and rice, from 31% to 14% by January 2004.

• on U.S. industrial products, ranging from furniture to medical equipment to elevators, from 24.6 % to 9.4% by 2005.

• on U.S. autos from an average of 80 to 100 percent down to an average of 25 percent by 2006.

China will also participate in the Information Technology Agreement and eliminate tariffs on computers, semiconductors, and related products by 2005 and open its telecommunications sector, including access to China’s growing Internet services, and expand investment and other activities for financial services firms.

Additionally, China will open up distribution services, such as repair and maintenance, warehousing, trucking, and air couriers.

The agreement also preserves safeguards against dumping and other unfair trade practices. Specifically, the “special safeguard rule,” to prevent import surges into the United States, will remain in force for 12 years and the “special anti-dumping methodology” will remain in effect for 15 years.

No matter how you look at it, this benefits the United States.

Unfortunately, many people have confused this vote with a vote to approve China’s joining the World Trade Organization (WTO). It needs to be understood, however, that China will likely join the WTO within the next year or so -- with Taiwan following China’s entry -- regardless of its trading status with the United States. That issue will be decided by the WTO’s working group and a two-thirds vote of the WTO membership as a whole.

Under WTO rules, only the countries that have “non-discriminatory” trade practices, i.e. permanent normal trading relations status, are entitled to receive the benefits of WTO agreements. If the Congress had not granted China this status, our country would be effectively shut out of China’s vast markets, while Britain, Japan, France and all the other WTO-member nations would be allowed to trade with few barriers. We would have effectively “shot ourselves in the foot” by such an action.

For California, America’s number one exporting state, this is especially important. Well over one quarter of California’s trillion dollar economy depends on international trade and investment, and for two decades California-China trade relations have grown dramatically. California exports to China topped $6 billion in 1998, generating over 100,000 California jobs.

I believe the real catalyst for change in China will not come from reprisal or isolation from the Western World, but rather from open interaction and involvement with it.

As I read history, political pluralism, respect for human rights, labor rights, and environmental improvements follow a country’s interactions with others and achieving a level of economic development and well being that has increased both the education and options of the people of that country. This has been the case elsewhere in the region, including Taiwan.

I believe making permanent China’s normal trading status and drawing them into the international trading community will help sow the seeds of positive change.”