The U.S. --China WTO Accession Deal:
A Strong Deal in the Best Interests of America
March 8, 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 has expanded at a phenomenal
annual rate of nearly 10 % over the past 20 years. During this period,
U.S. exports to China have grown from negligible levels to over $14
billion each year.
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. China also
agreed to eliminate "unseen" barriers, such as exclusive rights to
import and distribute goods.
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 such as
wheat, corn, and rice, and it will eliminate trade-distorting export
subsidies. Our producers may also export and distribute directly inside
China for nearly every agricultural product without going through
state-trading enterprises or middlemen. Sales in the Chinese market
will be a boon to American farmers, who have recently faced tough times.
Industrial Tariffs Will Be Slashed. Industrial tariffs on U.S.
products will fall from an average of 24.6% in 1997 to an average of
9.4% by 2005. Considering that manufactured goods comprise a large
proportion of American exports, the drop in Chinese tariffs is good news
for our high-tech manufacturers and basic industries.
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. China will phase in these
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. This will
allow our businesses to export to China from here at home, and to have
their own distribution network in China, rather than being forced to set
up factories there to sell products through Chinese partners. This is a
top priority of U.S. manufacturers and agricultural exporters.
New Markets For Information Technology. China will participate in
the Information Technology Agreement and will eliminate tariffs on
products such as computers, semiconductors, and related products by
2005. Our IT firms lead the world and stand to earn handsomely in this
huge, expanding, and information-hungry market.
Broad New Access For American 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 restrictions.
The Agreement Strengthens Our Ability To Ensure Fair Trade And To
Protect U.S. 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 concerns through:
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
Requiring China to eliminate barriers to U.S. companies that cost
American jobs. 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 home, 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 permanent 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 emergency.
Refusal To Pass PNTR Would Put American Farmers, Manufacturing, Workers
At A Disadvantage. The United States must grant China permanent NTR or
risk losing 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 but American farmers and
businesses could well be left behind.
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