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Permanent Normal Trade Relations With China: A Strong Deal for
America and Ohio May 12, 2000
THE WHITE HOUSE Office of the Press Secretary
For Immediate Release
May 12, 2000
Permanent Normal Trade Relations With China: A
Strong Deal for America and Ohio May 12, 2000
China's Entry To The WTO Will Slash Barriers To The Sale Of
American Goods And Services In The World's Most Populous Country.
China's entry into the WTO will dramatically cut import barriers currently
imposed on American products and services. This agreement locks in and expands
our access to a market of over one billion people. China's economy is
already among the world's largest and over the past 20 years has expanded
at a phenomenal annual rate of nearly 10 percent. During this period, U.S.
exports to China have grown from negligible levels to over $14 billion each
year, with Ohio alone accounting for $359 million of that in 1998.
China Made Unilateral Concessions; We Would Simply Maintain The
Market Access Policies We Already Apply To China By Granting It Permanent
Normal Trade Relations. China made significant, one-way market-opening
concessions across virtually every economic sector, including increasing access
to its markets for agriculture, services, technology, telecommunications, and
manufactured goods, each of which is important to Ohio. China also agreed to
eliminate unseen barriers, such as exclusive rights to import and
Agriculture tariffs will be cut by more than half on priority
products. On U.S. priority agricultural products, tariffs will drop from an
average of 31% to 14% by January 2004, with even sharper drops for beef,
poultry, pork, cheese, and other commodities. China will significantly expand
export opportunities for bulk commodities which Ohio is a leading producer of,
including soybeans, corn, and wheat. And China will eliminate trade-distorting
export subsidies that have reduced American exports to third markets like
Korea. Our producers may also export and distribute directly inside China for
nearly every agricultural product without going through state-trading
enterprises or middlemen. U.S. Agricultural exports in fiscal year 1999 were
$1.1 billion and USDA estimates that China's WTO accession would result in
$2 billion annually in additional U.S. agricultural exports by 2005.
Industrial tariffs will be slashed and Information Technology
tariffs eliminated altogether. Industrial tariffs on U.S. products will
fall from an average of 24.6% in 1997 to an average of 9.4% by 2005. By that
year Chinese tariffs on Ohio's growing information technology exports will
reach zero as well. Considering that industrial machinery and computers compose
the largest share of Ohio's $400 million exports to China, the drop in
Chinese tariffs is good news for exporters and workers.
Right to import and distribute. At present, China severely
restricts trading rights (the right to import and export) and the ability to
own and operate distribution networks, both essential to move goods and compete
effectively in any market. Under the agreement, China will phase in trading
rights and distribution services over three years, and also open up sectors
related to distribution services, such as repair and maintenance, warehousing,
trucking, and air courier services. Trading rights and distribution services
will allow our businesses to export to China from here at home, and to have
their own distribution networks in China, rather than being forced to set up
factories in China to sell products through Chinese partners. This is a top
priority of U.S. manufacturers and agricultural exporters.
Broad new access for services like
telecom/insurance/banking. The agreement also opens China's market for
services. For the first time, China will open its telecommunications sector and
significantly expand investment and other activities for financial services
firms. And it will greatly increase the opportunities open to professional
services such as law firms, management consulting, accountants, and
environmental services. China also agrees to ensure the existing level of
market access already in effect at the time of China's accession for U.S.
services companies currently operating in China, protecting against new
The Agreement Strengthens Our Ability To Ensure Fair Trade And To
Protect Ohio Agricultural And Manufacturing Base From Import Surges, Unfair
Pricing, And Abusive Investment Practices Such As Offsets Or Forced Technology
Transfer. Prior to the negotiations, Democrats and Republicans in Congress
raised legitimate concerns about the importance of safeguards against unfair
competition. As a result, no agreement on WTO accession has ever contained
stronger measures to strengthen guarantees of fair trade and to address
practices that distort trade and investment. This agreement addresses those
A China-specific safeguard. For the first 12 years -- in
addition to the existing global safeguard provisions -- China has also agreed
to a country-specific safeguard that is stronger and more targeted relief than
that provided under our current Section 201 law. This ensures that the U.S. can
take effective action in case of increased imports of a particular product from
China that cause or threaten to cause market disruption in the United States.
This applies to all industries, permits us to act based on a lower showing of
injury, and permits us to act specifically against imports from China.
Strong anti-dumping protections. The agreement includes a
provision recognizing that the U.S. may employ special methods, designed for
non-market economies, to counteract dumping for 15 years after China's
Requiring China to eliminate barriers to U.S. companies that can
cost Ohio jobs and technology. For the first time, Americans will have a
means, accepted under the WTO rules, to combat such measures as forced
technology transfer, mandated offsets, local content requirements and other
practices intended to drain jobs and technology away from the U.S. As stated
above, we will be able to export to China from Akron, rather than seeing
companies forced to set up factories in China in order to sell products there.
Provisions in WTO rules that allow the U.S. -- even when
dealing with a country enjoying NTR status -- to continue to block imports of
goods made with prison labor, to maintain our export control policies, to use
our trade laws, and to withdraw benefits including NTR in a national security
Refusal To Pass PNTR Would Put Ohio Farmers, Manufacturing, Workers
At A Disadvantage. The United States must grant China permanent NTR or lose
the full market access benefits of the agreement we negotiated, rights to
enforce China's commitments through WTO dispute settlement, and special
import protections. If Congress were to refuse to allow the United States to
grant China permanent NTR, our Asian and European competitors would reap these
benefits. Farmers, workers, and businesses in Ohio and elsewhere would be left
behind, and we would lose key elements negotiated in November to protect our
workers from unfair import surges from China.
China's Accession Will Help Promote Reform In China And Create
A Safer World. The agreement will encourage Chinese leaders to move in the
direction of meeting the demands of the Chinese people for openness,
accountability, and reform. The agreement:
Deepens market reforms. Obligates China to deepen its market
reforms, empowering leaders who want their country to move further and faster
toward economic freedom. This agreement will expose China to global competition
and thereby bring China under even more pressure to privatize its state-owned
industries and expand the role of the market in the Chinese economy. Chinese as
well as foreign businessmen will gain the right to import and export on their
own, and to sell their products without going through government middlemen.
Accelerates removal of government from lives of China's
people. Accelerates a process that is removing the government from vast
areas of China's economic life. China's people will have greater
scope to live their lives as they see fit. In opening China's
telecommunications market, including to Internet and satellite services, the
agreement will over time expose the Chinese people to information, ideas and
debate from around the world. As China's people become more mobile,
prosperous, and aware of alternative ways of life, they will seek greater say
in the decisions that affect their lives.
Strengthens rule of law in China. Obliges the Chinese
government to publish laws and regulations and subjects pertinent decisions to
review of an international body. That will begin to strengthen the rule of law
in China and increase the likelihood that it will play by global rules as well.
It will advance our larger interest in bringing China into international
agreements and institutions that can make it a more constructive player in the
world, with a stake in preserving peace and stability.