The U.S. House of Representatives is scheduled to vote on granting Permanent ...

The U.S. House of Representatives is scheduled to vote on granting Permanent Normal Trade Relations (PNTR) status to China the week of May 22, 2000. The vote will be very close and, as of today, House supporters of PNTR do not have the votes needed to pass the legislation. With Congressional Representatives back in their districts for the Easter recess, we need to capitalize on this opportunity to make sure they hear from agricultural interests. Up to now, the opponents of PNTR have been very successful at making themselves heard in Washington. As this vote approaches, I strongly urge you to contact your Representatives to encourage a vote in favor of PNTR.

In 1999, the United States and China negotiated a bilateral Agricultural Cooperation Agreement (ACA), the terms of which are of significant benefit to U.S. agriculture in general, and to the U.S. red meat industry specifically. Under this agreement, China for the first time will permit imports of U.S. beef and pork from any USDA federally inspected plant. The ACA marks an important first step towards gaining unfettered access for red meat to the Chinese market. The next step will come when China joins the WTO, but the benefits negotiated under the ACA, as well as the significantly reduced tariffs that are a condition of China’s WTO membership, will only be extended to U.S. producers and exporters if Congress adopts PNTR. If Congress fails to support PNTR, U.S. beef and pork exports to China will be at a disadvantage compared to the exports of other countries, including our major competitors. Please call your Representatives today to let them know U.S. agriculture needs a "yes" vote on PNTR.

Listed below are several talking points for your reference. Also attached is a letter issued recently by eight former U.S. Secretaries of Agriculture urging Congress to support PNTR.

Talking Points on PNTR for China:

• Granting PNTR does not force the U.S. to cede any additional market access. The U.S. market is already open to Chinese goods. PNTR will simply open the Chinese market to U.S. goods.

• With a population of nearly 1.3 billion people, China remains the world’s largest potential consumer market.

• With steadily rising per capita incomes and an economy that grows at a rate of 7% annually, China’s demand for high quality proteins like U.S. beef and pork is increasing every year.

• China is the world’s largest consumer of pork. When it enters the WTO, the tariff on U.S. pork will be phased down from 20% to 12% by 2004.

• Tariffs on U.S. beef will be phased down from 45% to 12% by 2004 once China joins the WTO. This will make U.S. beef significantly more affordable for Chinese consumers.

• U.S. agriculture will finally be allowed a level playing field since China’s WTO conditions include the elimination of export subsidies, the abolishment of unjustified sanitary and phytosanitary measures, and the reform of monopoly state purchasing agencies.

 

Why Granting China Permanent Normal Trade Relations Status

Is Essential for American Agriculture, as well as the U.S.’s Overall Interest

- Written by the Former Secretaries of Agriculture -

_________________________________________________________________________

As former Secretaries of Agriculture, we wholeheartedly support the President’s legislative proposal to grant Permanent Normal Trade Relations (PNTR) to the People’s Republic of China. Only by passing PNTR will we be able to reap the benefits -- economic and otherwise -- of China’s imminent accession to the World Trade Organization (WTO).

China is home to one out of every five human beings, more than 1.2 billion people strong with a rapidly expanding middle class and an economy growing at 7 percent a year. There is no nation that offers a greater potential customer base for American businesses. But trade barriers of every kind have limited our access to the Chinese market and contributed mightily to the nation’s record trade deficit.

American farmers and ranchers, in particular, need to do more business with China. While the rest of the nation has enjoyed unprecedented prosperity, agriculture is facing its third consecutive year of low prices and economic sluggishness. Agriculture is highly dependent on exports, more than twice as much as other sectors of the economy. But last year, every man, woman and child in China took in less than a dollar’s worth of American agricultural goods.

Chinese membership in the WTO could help turn that around. Our farmers could take advantage of dramatically reduced Chinese tariffs on everything from frozen beef cuts to cherries and peaches. They could do business with private individuals in China, without the interference of a state-trading entity. And our farmers could compete on a level playing field, since China will abandon export subsidies and eliminate unjustified sanitary and phytosanitary barriers as conditions of WTO entry.

All these benefits could be ours, but only if Congress approves PNTR.

We have nothing to lose by passing PNTR. This is not like most other trade agreements, where we have to give something in order to get something in return. Since our market is already open to China, we are entirely on the receiving end of all the concessions.

On the other hand, we have everything to lose by rejecting PNTR. China is still likely to become a WTO member, but we would be left on the outside looking in. We would be holding open the door for our global competitors to march into China, where they would cash in on the accession terms we negotiated and seize market share that we would be unable to recapture. We would be walking away from an increase of approximately $2 billion in annual farm export sales. It would amount to a kind of unilateral economic disarmament.

The economic case for PNTR is a compelling one, but it’s not the only one. There are also national security implications. Rejecting PNTR would weaken our ties with a nuclear power that has the ability to tilt the global balance of power in Asia.

It would also be an irresponsible abdication of American global leadership. The world’s most populous nation is gradually adopting wholesale economic reform, which could lead to political freedoms never before enjoyed by its people in thousands of years of existence. What kind of message would it send if the world’s most powerful nation, the United States of America, instead of helping cultivate Chinese reform through a policy of engagement, instead chose to back away from China and fracture the bilateral relationship?

PNTR is not a referendum on China’s governing regime. Support for PNTR is in no way a tacit approval of China’s labor standards, human rights philosophy, Taiwan policy or its approach to free speech and religious freedom. And rejection of PNTR will not increase the wages of one Chinese worker or protect a single political dissident.

In fact, it is only through increased commercial ties that we can influence China’s politics. In the process of exporting goods and services, we also export information and values. As free enterprise in China grows, it will loosen the government’s totalitarian grip, with new economic opportunities offering the Chinese people an alternative form of material support and reducing their dependence on the state. By helping China become a more open economy, we can move them closer to becoming an open society.

As former Secretaries of Agriculture, we believe that PNTR is critical to maintaining the competitiveness of our farmers in the 21st century. As American citizens, we believe that PNTR is an important step toward the ultimate goal of a free, open, stable, democratic China.

The Honorable Bob Bergland
The Honorable John Block
The Honorable Earl Butz
The Honorable Orville Freeman
The Honorable Mike Espy
The Honorable Clifford Hardin
The Honorable Richard Lyng
The Honorable Clayton Yeutter