Mr. President, I rise today in favor of the motion to proceed to H.R. 4444, the bill to grant permanent normal trade relations status to China.
There are many reasons why I support this bill, which is one of the most important matters to come before the Senate this session.
But today, I would like to address just two: jobs and human rights. In each case, I will address the concerns of real people. Too often, when we talk about major policy changes, we talk in lofty terms, not connected to people's concerns, and what is important to them. Today, I would like to talk about how real people will be affected by making it possible for the United States to take advantage of China's pending accession to the World Trade Organization.
Mr. President, lowering protectionist tariffs, and tearing down trade barriers that discriminate against American products, will create many thousands of new American jobs. A new era of free trade with China, under WTO disciplines, will help us continue to build the tremendous prosperity we enjoy as a direct result of the success of our postwar world trading system.
In Iowa, we know that our economic interdependence with the rest of the world is not a policy choice. It is a fact. Trade means jobs. In just 5 years, Iowa's merchandise exports to China have soared 35 percent. In the Waterloo-Cedar Falls area alone, recent merchandise sales to China have surged 806 percent.
Iowa's trade-related jobs means a young couple can afford their first home. They mean tuition for school. They mean the ability to buy a car and to afford to care for one's family.
But unless we seize this moment, opportunity will pass us by. When China enters the WTO, which it will do, regardless of the outcome of this vote, and we do not remove all our current conditions on trade with China, other countries will reap the rewards of the trade deal we helped negotiate. American companies will be forced to sit on the sidelines, as companies from the European Union, Asia, and elsewhere, take our business, and ultimately, take our jobs.
Mr. President, let me give you two real-life examples. Tucker Manufacturing Company is a family-owned business in Cedar Rapids, Iowa, that has developed a unique window washing system, which it makes and sells all over the world. Tucker has made a few small sample sales to China and has now found a distributer that would like to make a large order.
Tucker knows that in the past, state-owned distribution companies in China have dictated commercial terms that have often harmed exporting companies like Tucker. They would like to see China become a WTO member so that distribution rights are no longer strictly controlled by the State, and so that any new transactions in China are protected by the rule of law.
Diamond V Mills in Cedar Rapids, which I visited just last week, has exported its yeast culture feed ingredients to China since 1996, by operating through a local distributer. The company wants to sell directly to its end user, but has not been able to do so, due to China's current restrictions on a foreign company's rights to distribute its products in China.
Under its WTO Accession Agreement, China has committed to open its markets to the private distribution networks Diamond V Mills needs. If Diamond V Mills can get access to new distribution networks in China, it will generate more sales, earn more revenue, provide more jobs, create more opportunity, and more prosperity for the Iowans who work there.
Mr. President, these are only two examples of how Iowa's manufacturing sector will benefit through expanded trade with China. There are many more.
Iowa's farmers and agricultural producers will see tremendous benefits as well, because China's WTO Accession Agreement will dramatically lower key agricultural tariffs and eliminate many non-tariff trade barriers. As a result, our farmers will sell more soybeans and more soy oil to China than ever before.
After the United States, China is the second-largest consumer of corn and corn products in the world. China's WTO commitments will create a great export opportunity for Iowa's corn growers and for corn growers across America.
And Iowa State University Professor Dermot Hayes recently told my International Trade Subcommittee that if China fully implements its WTO accession commitments, we could see hog prices rise by as much as $5 dollars per head. That's a larger benefit than any of the government support programs we have heard about lately.
And, unlike some of the proposals I have heard, we wouldn't have to impair our obligations under the WTO's Subsidies Agreement, or the WTO Agriculture Agreement, to do it. Second, Mr. President, I would like to discuss the issue of human rights and political freedom in China.
Like all Americans, Iowans care deeply about the struggle for liberty. Many have family members who have given their lives in freedom's cause. Or they know someone who has. It pains us to hear horrible accounts of repression. We are rightly repelled. We don't understand why it happens, and we want it to change. But the fact is, we can never turn China into a model of constitutional democracy through economic isolation.
However, we can help bring about fundamental reform in China's economy and political structure, through enforceable WTO rules that do not discriminate, that are consistent, and that are not arbitrary. Perhaps most important is the fact that WTO decisions are based on the democratic principle of consensus rule.
All of these principles — democratic decision-making, non-discrimination, nonarbitrary regulation — are also the obvious, essential ingredients of political freedom. The process of economic reform, guided by China's WTO commitments, will mean that China will become more open. More free. We know, perhaps better than any nation on earth, that economic and political freedoms share deep roots. That economic and political rights go hand-in-hand is at the heart of our own constitutional heritage.
Many in China know that economic and political reform are closely linked as well. That's why many of China's military hardliners oppose China's entry into the WTO. Perhaps it is this inevitable linkage between economic reform and political freedom that inspired the Dalai Lama, no stranger to China's religious repression, to say: "I have always stressed that China should not be isolated. China must be brought into the mainstream of the world community..."
To those who doubt that economic reform has occurred in China, or that it is significant, I ask them to consider how much has changed in half a century. In 1952, China's Communist government mounted a wide-ranging crusade to undermine private entrepreneurs, Business people were commonly condemned as "counter revolutionaries." Many were assessed large fines and forced out of business. By 1956, China required all private firms to be jointly owned and run by the State. In practice, this meant the State controlled all private enterprise in China.
It wasn't until the early 1980s that private enterprise began to reemerge in China. More significantly, it wasn't until 1988 that the private economy even had a defined legal status in China. Today, just 12 years later, China is a very different country. Today young Chinese engineers who studied and worked in California's Silicon Valley are going back to China, lured by entrepreneurial opportunities that didn't even exist a few years ago. The number of individuals employed by the private sector in China has soared by over 31 percent in the last three years. That's bad news for China's State-owned enterprises. It's bad news for the People's Liberation Army, which depends on many State-run businesses for revenue. But this development is good news for the cause of freedom.
As the number of individuals employed in the private sector rises, the State will have less and less direct control over how people think and react to political change. MIT Professor Edward Steinfeld is one of this country's keenest China scholars. Here is what Professor Steinfeld says about the meaning of China's WTO concessions on China's direction as a country: "The concessions of 1999 represented a thorough reversal of course. Instead of reform serving to sustain the core, the core itself would be destroyed to save reform, along with the growth, prosperity, and stability reform has brought to China. In the new view, instead of using market forces to save state socialism, state socialism itself would have to be sacrificed to preserve the market economy."
I agree with Professor Steinfeld. China's membership in the WTO will require it to reform a very large portion of its economy. Not only to comply with WTO rules, but to be able to compete internationally. Mr. President, with a "yes" vote on the motion to proceed, and a "yes" vote on approving permanent normal trade status for China, we can change the world. We can be on the right side of history. I strongly urge my colleagues to support the motion to proceed.