U.S.-China Economic and Security Review Commission, "Hearing: Bilateral Trade Policies and Issues Between the United States and China," August 2, 2001

August 2, 2001
Room 124, Dirksen Senate Office Building
1st & Constitution Avenue, NE
Washington, DC

PREPARED STATEMENT OF CHAIRMAN C. RICHARD D’AMATO

Today is the Commission’s second hearing on U.S.-China trade and investment issues.

The Commission was created by Congress to examine our growing economic relationship with China and the implications of this relationship on U.S. national security interests. Perhaps no aspect of the U.S.-China economic relationship is as significant to this examination as the implications of China’s impending accession to the World Trade Organization (WTO). Many believe China’s WTO accession will reap significant economic benefits for the United States in terms of greater access to the Chinese market for U.S. goods and services, and that it will bring about positive political and economic reform within China. Others believe that the potential benefits to the U.S. economy of China’s WTO accession are overstated (some in fact believe it will increase our trade deficit with China), and that China will be unable or unwilling to live up to its WTO commitments. Today’s hearing should help shed light on this important debate.

The implications for the U.S. economy and U.S. national security interests of China’s WTO accession will likely vary by economic sector. Today we will hear from labor and industry representatives from a number of the key sectors that will be impacted. The Commission looks forward to the testimony of these witnesses and to their perspectives on current and future trends regarding our trade and investment relationship with China.

Today’s hearing will aid the Commission in carrying out its general mandate to examine the economic factors in the U.S.-China relationship that pose challenges to U.S. national security. Additionally, today’s proceedings should help the Commission address the specific mandates in its Charter to report to Congress on (1) actions China has taken in the context of the WTO that are adverse or favorable to U.S. interests, (2) differences between China’s trade and investment relationship with the U.S. and its other trading partners, (3) the national security implications of the large capital flows between the U.S. and China, and (4) whether the U.S. should consider invoking Article XXI of the GATT, which allows parties to derogate from their GATT obligations when their national security interests are implicated, as a result of any adverse impact on the U.S. arising from its economic relationship with China.

Later this Fall, the Commission plans to hold a third hearing on trade and investment issues to explore some of the key issues—such as trade in financial services and protection of intellectual property rights—that were not covered in the first two hearings. The Commission will also hold hearings on export controls, Chinese companies’ fundraising in the U.S. capital markets, the Chinese budget and, tomorrow, China’s strategic perceptions of the U.S. The current schedule is available on the Commission’s website.

I would like to turn now to my Co-Chair for this hearing, Commissioner Becker, for an opening statement.

PREPARED STATEMENT OF COMMISSIONER GEORGE BECKER

It is my pleasure to be co-chairing today’s important hearing on bilateral trade policies and issues between the United States and China. We will hear testimony from witnesses representing a broad array of sectors impacted by U.S.-China trade, as well as from representatives of the Administration. These witnesses will give us their perspectives on what China’s WTO accession means for U.S. industry and U.S. workers. The topic of this hearing is particularly timely, so the Commission thanks all our panelists for their appearance here today.

We will begin with a panel focusing on the United States steel industry and the impact of China on the world steel market. Our panelists for that topic are Leo Gerard, President of the United Steelworkers of America, an organization I was honored to lead prior to Mr. Gerard’s tenure, and Thomas Usher, Chairman and CEO of USX Corporation.

We then have a panel to discuss the important question of China’s accession to the World Trade Organization and viewpoints on China’s compliance with agreements in both the bilateral and multilateral contexts. Peter Davidson, General Counsel to the United States Trade Representative, Charles Winwood, Acting Commissioner at the United States Customs Service and Donald Shruhan, Deputy Assistant Commissioner for International Affairs will present the Administration’s perspectives. Gordon Chang, a lawyer with many years experience in China and author of the book The Coming Collapse of China, just published yesterday, will share his views from the private sector.

We will address the impact of China as an emerging influence on the aircraft, aerospace and automobile industries in the last panel this morning. General John Douglass, President and CEO of the Aerospace Industries Association, Robert Thayer, General Vice President of the International Association of Machinists and Aerospace Workers, and Steve Beckman, Assistant Director of the Government and International Affairs Department at the United Auto Workers, will discuss the challenges and possibilities posed by China’s growing role in these industries.

In the afternoon, we begin with a panel looking at the agriculture sector and the views of China from our farming community. On that panel we have Robbin Johnson, Vice President for Corporate Affairs at Cargill, Henry Jo Von Tunglein, Vice Chairman at the National Association of Wheat Growers, Dwain Ford, First Vice President of the American Soybean Association and Chuck Lambert, Chief Economist at the National Cattleman’s Beef Association.

We will conclude today’s hearing with a discussion of U.S.-China trade in the computer electronics and telecommunications sectors. Ed Fire, President of the International Union of Electrical Workers, and David McCurdy, President of the Electronics Industry Alliance, will testify on the specific issues raised by trade in these industries. Merritt Todd Cooke, Commercial Section Chief at the American Institute in Taiwan, will testify on the state of these industries in the context of the U.S.-China-Taiwan relationship.

We obviously have a lot of ground to cover. The Commission again thanks our panelists for coming today and sharing their views.

China and the US Steel Industry
Leo W. Gerard, International President, United Steelworkers of America; Thomas J. Usher, Chairman & CEO USX Corp.

Administration Perspectives/ Bilateral Trade and WTO Issues/Adequacy of Enforcement Laws Related to Imported Goods
Peter Davidson, General Counsel, United States Trade Representative; Charles W. Winwood, Acting Commissioner, U.S. Customs Service; and Donald Shruhan, Deputy Asst. Commissioner, Intl. Affairs, U.S. Customs Service; and Gordon Chang, Attorney and Author, The Coming Collapse of China

Aircraft/ Aerospace / Automobiles-Auto Parts Issues:(Relocation of Trade Jobs, Market Penetration and Technology Transfer)
Robert Thayer, Executive Council Member/General Vice President, Intl. Assoc. of Machinists/Aerospace Workers (IAM); General John W. Douglass, President/CEO, Aerospace Industries Assoc.; Steve Beckman, Asst. Dir. Govt. & Intl. Affairs Dept, UAW

Agricultural Trade Issues
Robbin S. Johnson, Sr. Vice President, Director of Corporate Affairs, Cargill, Inc.; Henry Jo Von Tungeln, Vice Chairman & Farmer, Natl. Assoc. of Wheat Growers; Dwain Ford, First Vice President, American Soybean Assoc.; Chuck Lambert, Chief Economist, National Cattlemanís Beef Association

Computer Electronics/Telecom Issues
Ed Fire, President, International Union of Electrical Workers; David McCurdy, President, Electronics Industry Alliance; Merritt Todd Cooke, Jr., Chief, Commercial Section, American Institute In Taiwan