The Administration strongly opposes H.J.Res. 121, which would disapprove
normal trade relations (NTR) with China. Renewing nondiscriminatory trade
treatment, previously known as most-favored-nation (MFN) treatment, does
not give China a special deal. It simply extends to China the ordinary
tariff treatment the United States extends to virtually all nations. The
Administration urges the Congress to defeat H.J.Res. 121 for the reasons
The Administration urges support for the renewal of NTR to China because it
advances critical U.S. interests. Maintaining our overall relationship
with China will enable the United States to actively engage China in the
months and years ahead, to enhance areas of cooperation, and to pursue
American interests where we differ. That engagement can help determine
whether China becomes an increasingly open and productive partner for
America, or whether it becomes more isolated and unpredictable. Extending
NTR status to China is vital to our ability to successfully engage China
and advance U.S. interests.
Engagement has resulted in significant progress in areas important to U.S.
interests -- i.e., economic and regional stability in Asia, preventing the
spread of weapons of mass destruction, combatting international crime and
drug trafficking, and protecting the global environment. China has agreed
to end nuclear cooperation with Iran. China has condemned both India and
Pakistan's nuclear testing and has agreed to work towards preventing an
arms race in South Asia. China has helped the United States to convince
North Korea to freeze its nuclear program and is playing a role in the
Korean peace talks. China has also played a constructive role in
responding to the Asian financial crisis, in part by maintaining its
exchange rate. At the recent summit, China agreed not to target nuclear
weapons at the United States and to actively study joining the Missile
Technology Control Regime. China, through engagement, is increasingly
moving from being part of the proliferation problem to being part of the
solution. The United States continues to maintain strong unofficial
relations with Taiwan, including arms sales, based on the Taiwan Relations
Act. The Administration has welcomed Hong Kong's smooth transition to
Chinese sovereignty during which its high degree of autonomy and the human
rights of its residents have been protected.
H.J.Res. 121 would also undermine America's economic interests. U.S.
exports to China and Hong Kong support an estimated 400,000 American jobs.
Chinese retaliation would imperil or eliminate these jobs, exclude American
companies and workers from future business in one of the world's most
dynamic markets, and give an open field to European and Asian competitors.
Denial of NTR would also hurt U.S. consumers, who because of higher tariffs
could pay as much as $590 million more each year for goods such as shoes,
clothing, and small appliances. Goods manufactured with Chinese components
would also increase in cost, thereby, reducing the competitiveness of U.S.
goods domestically and internationally.
Engagement allows the Administration to deal forthrightly with our
differences, including human rights and universal principles of freedom and
democracy. The President during his recent visit to China made the case
not only to the Chinese leadership but directly to the Chinese people that
human rights are universal and that human freedom is indispensable to a
country's stability and progress. Engagement with China is the best way to
advance these U.S. ideals. This approach has produced results, although
more needs to be accomplished. These results include: the release of
several prominent political prisoners; agreement to sign the UN Covenant on
Civil and Political Rights; hosting visits of U.S. religious leaders and
the UN Working Group on Arbitrary Detention; and substantial cooperation
with the United States on the rule of law. Over time, the more the United
States brings China into the world, the more the world will help bring
freedom to China.
Renewal of NTR best advances the substantial U.S. interests that are at
stake. Revoking NTR would significantly damage the U.S. relationship with
a fourth of the world's population. It would effectively sever our
economic relationship with China, undermining our capacity to influence
China in a broad range of areas. It would reverse three decades of
bipartisan China policy and would seriously weaken our influence not only
in China, but throughout Asia. The withdrawal of China's NTR status would
prevent further progress on these and other important issues.