GWEN IFILL: Kwame Holman begins the China trade story.
KWAME HOLMAN: A day before the House is scheduled to decide whether to extend permanent normal trade status to China, neither side in the debate could say for sure which way the vote would go. An overwhelming majority of Republicans say they favor normalizing trade with China, while just as many Democrats say they're opposed. The latest Associated Press survey of House members showed 194 would vote, or were likely to vote, for normal trade with China. 169 said they would vote "no," or were leaning that way. That leaves about 72 members undecided or unannounced. If all 435 House members vote tomorrow, a simple majority — 218 — would be needed to approve or defeat the measure.
SPOKESMAN: The Rules Committee will come to order.
KWAME HOLMAN: This morning the House Rules Committee met to decide the length of debate on the trade bill and whether any amendments would be allowed. The hearing also served to preview the positions the opposing sides will argue. Committee Chairman David Dreier said he believed the significance of this bill is unmatched.
REP. DAVID DREIER, Chairman, Rules Committee: May, in fact, be the most important vote cast in the 213 year history of the United States of America.
KWAME HOLMAN: Ohio Democrat Tony Hall, however, said he was troubled by the momentum the bill appeared to be gaining.
REP. TONY HALL, (D) Ohio: This makes it look like we're kind of rolling over for the sake of trade, for the sake of business. And the fact is — is that every agreement we've made with the Chinese, they've broken.
KWAME HOLMAN: Massachusetts Democrat Joe Moakley got into a frank discussion about the potential effects of the bill with Illinois Republican Phil Crane, who was seated with his back to the camera.
REP. JOE MOAKLEY, (D) Massachusetts: I agree with you that by should trade with China. It's a potential gold mine, and I vote every year for trade with China. But I think that we shouldn't do it every year. I think if we give it permanent status, then we're not going to have any leverage when we talk about human rights abuses.
REP. PHIL CRANE, (R) Illinois: This is a vote that is required if we are going to enjoy all of the WTO trade advantages with a new member of WTO, namely the People's Republic of China. And if we do not approve this, and we go back to simply renewing our annual trade relations, normal trade relations with China, they continue to access our market, but we are locked out of theirs, as we are at the present time.
REP. JOE MOAKLEY: Yeah. We'll argue on the floor.
REP. PHIL CRANE: Okay. But please, we need... Joe, we need your support. We desperately need your support.
KWAME HOLMAN: Late this afternoon, the China trade bill was brought to the House floor and the first of what's expected to be several hours of debate got underway.
REP. NANCY PELOSI, (D) California: We have been told over the last decade that human rights in China would improve if we had unconditional trade benefits for China. Not so. More people are in prison for their beliefs in China today than at any time since the Cultural Revolution.
REP. SANDER LEVIN, (D) Michigan: We must be activists in this process of change. We, the United States, cannot isolate China and its one billion, 200 million people. And we must not isolate ourselves from impacting on China's future direction.
KWAME HOLMAN: A final vote on the China trade bill is expected late tomorrow afternoon.
GWEN IFILL: Ray Suarez samples opinions outside congress.
RAY SUAREZ: And for that, I'm joined by Richard Trumka, secretary- treasurer of the AFL-CIO; Harry Wu, a human rights activist imprisoned in China for two decades before being released in 1979; he is a research fellow at the Hoover Institution. Christopher Padilla, director of international trade relations at the Eastman Kodak Company. And Xiao Bo Lu, Assistant Professor of Political Science at Columbia University; he was born in China and lived there for 25 years before coming to the United States.
Christopher Padilla, we just heard how many people are avidly awaiting this vote. What's at stake for Eastman Kodak? Why are you hoping for a yes vote for PMTR?
CHRISTOPHER PADILLA, Eastman Kodak Company: Well, Ray, China is the second largest market in the world for photographic products after the United States. That's up from just five years ago. The Chinese have agreed to enter the World Trade Organization and make some unprecedented new reforms in their economy to open their market, throw open the doors of their market in ways that have never been done before. They will open Internet services. They will open distribution services. They will open to U.S. products and farm goods in ways they never have. Chinese goods already have access to the U.S. market and have for 20 years. The vote tomorrow is not about whether China's goods will be allowed in the U.S. They already are and still will be no matter what Congress does tomorrow. The vote tomorrow is about one thing only: Whether or not American companies and made-in-the-U.S.A. Products will have access to the Chinese market. The other guy is opening their market in this trade agreement. It's a one-way deal, all in our favor. And we need to take advantage of it by approving PMTR.
RAY SUAREZ: Harry Wu, what's at stake for the people you're worried about, the workers in China?
HARRY WU, Human Rights Activist: Let me respond to the gentleman from Eastman Kodak. I think that Eastman Kodak business in China is an immoral whiz because they don't treat the Chinese workers as the American workers in America. The Eastman Kodak business in China, their business partner is the Chinese government. So economically, not only, you know, the benefit go to the American business and also benefits some Chinese workers, but major beneficiaries in this trade is Chinese government, Chinese Communist government.
Secondly, thinking of a moral, moral standard, Americans is all the time thinking about the moral, ethic standard. I don't think they apply the same standards to Chinese workers.
And the last question is security. We have to know China is a Communist regime. For example, last August I was in Far East of Russia, Vladivostok. I saw, you know, Vladivostok is the headquarters of the Pacific fleet of Russia. I saw the submarine and battleships lined up in the port because they don't have money to operate. I right away thought -- they got a purchase order from China, and they did. Last February there was a missile destroyer. You know, this destroyer was designed by the Soviet Union to attack...
RAY SUAREZ: You're taking this a little far afield. Xiao Bo Lu, how do you answer hard by Wu's concerns about the common rank-and-file Chinese citizens?
XIAO BO LU, Columbia University: Let me take up the labor rights issue. Are their labor rights abuses in China? You bet there are. Are they cases of labor law violations such as child labor, sweatshops and poor working conditions, you bet there are. But I think what this agreement, PNTR will do, is to enhance, improve the labor conditions in China, not to make them worse. As a matter of fact, in the last two decades, the Chinese government has done much to improve the labor conditions of China. For example, in the last decade also, China has passed a series of labor legislation, including the 1995 labor law, laws on minimum wage. Incidentally, all major cities now in China have minimum wage regulations, including the city of Shanghai, the hometown of Mr. Wu. You know, I think the further... What PNTR and WTO. Membership is going to do is going to subject China to higher standards of labor practice according to the WTO rules.
RAY SUAREZ: Well, let me turn to Rich Trumka at that point. Doesn't that sounds good to you as a labor leader?
RICHARD TRUMKA, AFL-CIO: Well, first of all, let many go back and correct a lot of the miss information that's been perpetuated about this. We're against this agreement because, one, it's permanent. And we're rewarding China for the most outrageous conduct. They've closed markets, they've signed an agreement with us to open markets. And they've violated those agreements.
Second of all, this is not about sending products to China. This is about sending manufacturing facilities to China. Now, the gentleman from Eastman Kodak told you that we have to do this, they're opening up their market so it's a one-way street. This is really good for us. Several years ago, China agreed with us. They signed an agreement that said they would open up their markets. They violated it. They signed another agreement with us saying they would give us "most favored nation" status, so if they grant it to anybody in the world, they have to give it to us unless they violate their agreement.
This is from Eastman Kodak, these are two quotes from Eastman Kodak. This will demonstrate what this is about. It's about sending manufacturing capacity to China, not products. Two quotes: "In a market such as China, where the value of business is expected to grow rapidly, local manufacturing is simply a better business model." Eastman Kodak. Two: "China's manufacturing operations reflect Beijing's determination to create professional enterprises which could displace U.S. imports and boost tax revenues."
RAY SUAREZ: Let me turn at that point to Christopher Padilla.
CHRISTOPHER PADILLA: First of all, let me reject categorically the charge Mr. Wu made that we're conducting amoral business in China or immoral. As a matter of fact, Kodak and other U.S. companies are a model for Chinese labor practices in China. For example, at our facility in Shaman, which is on the coast near Taiwan, we recently exceeded five million safe working hours in that facility, which is a record for any company in China. Not only that, we are not a partner with the Chinese government. We purchased from the Chinese government the assets of their state-owned photographic industry. And in doing so, we increased wages. We now pay between two to four times as much as workers could get in the Chinese government-owned factory. So we have worldwide environmental standards as well as worker standards that are the highest in the world, and that's why jobs in American companies in China are among the most sought after, because we pay well, and we treat people right. We're not rewarding China, as Mr. Trumka says.
RAY SUAREZ: But absent PNTR, without PNTR, you mentioned that China's become the second largest market for photographic materials for Eastman Kodak. What would permanent status do that this arrangement that you're already prospering under...
CHRISTOPHER PADILLA: That's a good question. Permanent status would ensure we continue to have a level playing field, because China is going to throw open its market later this year when they enter the WTO, no matter what Congress does. The vote is only about whether American companies and made in the U.S.A. products will be able to benefit from this agreement we exported $175 million worth of products last year, made in USA products in China. That was up 75 percent from the year before. If we can't get access to the Chinese market on the same terms as our German and Japanese competitors, it hurts workers in the United States. And that's why...
RAY SUAREZ: Let me turn to Harry Wu, because you've mentioned you don't want us to lose... the United States to lose its leverage in these conversations. But the "most favored nation" status agreements that were reviewed yearly became... they were never rejected. China was never turned down for this status. They were eventually seen by their critics as a rubber stamp. What leverage do you lose if you go to PNT, permanent trading status?
HARRY WU: Permanent means we don't have leverage. Let me respond to the Kodak representative, because he rejects so-called immoral. Two questions: Is Chinese workers in your company in China, in Shaman, if they want to go to organize a free union, these people go to jail. Do you... are you aware of that? Second, a woman working for Kodak in China, if they give birth without a government permit, they are fired by the company. Are you aware of that? In China, the birth control policy is applied to every single woman, and according to Chinese policy, if they give birth without a permit from the government, the company will fire them. Is Eastman Kodak American boss aware of that?
RAY SUAREZ: Let me get a quick response to those two questions? Are you aware of either of those things?
CHRISTOPHER PADILLA: No. It's simply not true. I would challenge Mr. Wu to provide specific evidence. The fact of the matter is that American companies are leading by example in China, which is why so many Chinese would like to work at American companies, because we provide safe working conditions, and it's a fact of the matter that by engaging more with China, by trading more with China, we're helping to sew the seeds of political reform. That's why respected Chinese... respected opponents of the Chinese regime, like the Dalai Llama, like Martin Lee, the chairman of the Democracy Party in Hong Kong, like Renwan Bing, the man who spent 11 years in jail for his activities in the democracy movement in 1979 have all said the same thing, which is if you want the trade... If you want the change China, you should trade with China.
RICHARD TRUMKA: But we do trade with China. We trade with them every year. This isn't about trade with China. Under the current system, we trade with them. We have most favored nation status with them. And you have to agree...
CHRISTOPHER PADILLA: We don't have access to mare markets.
RICHARD TRUMKA: We do. If they don't, they've violated another trade agreement with us, because they said to us, "We'll give you most favored nation status." They've signed that agreement since 1979. Let me ask you this one other question. I think this is an important question. Now you say that doing this trade with them is going to change China. There's little Burma over here. Burma was a charter member of the WTO. Every year the State Department and the ILO accuses Burma of being -- of crimes against humanity. They have executions. They torture people. And we haven't changed them, even though they've been in the WTO since they started, and do you know why? Because human rights and labor rights and environmental rights and religious rights are specifically excluded from the WTO. We can't enforce them. So when we sign this, and make it permanent, we will lose our section 301 rights to unilaterally sanction them, and that threat, even though it wasn't used, kept them modestly in line.
RAY SUAREZ: Xiao Bo Lu?
XIAO BO LU: Yes. I think as a scholar, who has no ties with Kodak, I'd like to comment on the argument about how immoral Kodak Company has been doing in China. I think, I understand that Harry Wu has a lot of concerns for labor rights in China, and I just hope that he has done some research in China itself and to interview people and to find out the truth.
I have done some research on the labor...on the labor rights in the foreign companies in China. And I find that the -- as a matter of fact, the ford companies have the best labor practice, especially the large multinational companies from the United States in China. I can give you an example of collective bargaining. You know, 20 years ago, such a term never existed in Chinese vocabulary. You know, there's no -- of course, there's no contract. There's no collective bargaining. And starting in 1994, the government actually started to pilot, experimenting collective bargaining in the foreign sector. And now, last year, the government started to implement it in all sectors. So the foreign sector, foreign investment sector provided models for labor -- good labor practice, and a testing ground for more improvement of labor governments in China.
RAY SUAREZ: Then, Mr. Xiao, let me jump in there. Might it be that you're both right -- that those workers who are still in the old state industrial sector or down on the farm and waiting for the blast of American agricultural imports have more in common with American workers in marginal or outdated industries than they do with their own industrial leaders, just as in the United States there are winners and losers, as well? Are we making a mistake by looking at this as a Chinese-American binary, yes-no question, rather than there being winners and losers in both societies?
XIAO BO LU: You're absolutely right. I think any drastic structural change would create losers and winners. Indeed you're right to point out some workers in the state sector will lose out in this -- as a result. And some farmers in China may suffer, too. But in the long run, as China's inefficient economy, inefficient state sector being restructured, and that would benefit workers, eventually create more jobs for the Chinese working population, which is, you know, it's 100 million large.
HARRY WU: Well, I don't have a crystal ball talking about the long-term future. But we have to come back to thinking about the present. What would happen right away we give the Chinese permanent NTR? Listen, just recently the Chinese government said, "Well, we're going to have a war games against Taiwan." Why does a country have… Why does this regime have such a powerful weapons system? Why does this government today have such a, you know, big capacity to do all kinds of threats to the democracy of Taiwan? Where's the money from? The hard currency comes from where? It comes from our pocket. The Communist regime everywhere, in Moscow, in everywhere, in Havana, they lack of money. Why Beijing communist have such a big money to do everything they want?
RAY SUAREZ: Well, Mr. Padilla, can you look at this issue in just. -- as just an economic question and take away these threats of security and workers rights?
CHRISTOPHER PADILLA: No, I think it's an important foreign policy question. That's why this vote in Congress tomorrow is so important. I think that's why people like retired General Colin Powell and the newly elected president of Taiwan have come out in favor of this, because they recognize...
HARRY WU: That's not right.
CHRISTOPHER PADILLA: ... That increasing the engagement with China is the best way to moderate China's political behavior. If the Congress tomorrow votes against permanent normal trade relations, the people who will be cheering the loudest in Beijing are the generals and the People's Liberation Army and the communist party bosses in the state-owned industries who don't want reform. If we turn our back on reform, if we isolate China, it will be a mistake of gargantuan proportions, not only economically, but more importantly, from a political standpoint.
RAY SUAREZ: We've only got less than a minute.
RICHARD TRUMKA: No one is saying isolate China. That's the smoke screens they blow out because they don't have the facts. Looks, we have a $70 billion trade deficit with China. The U.S. International Trade Commission came out with a study yesterday saying, if you give them permanent, permanent NTR status, two things will happen. We'll lose one million jobs, and the trade deficit will increase.
CHRISTOPHER PADILLA: You're up to one million now? You started at 600,000.
RICHARD TRUMKA: His company has told you what they want to do. They want to produce there locally. That's what this is about. I think you have to go back and ask yourself, you know, if it's so good, why don't we just continue the way we are right now, because no one but no one is saying isolate China. We're saying keep the only lever that we have, and that's the annual vote. You lose nothing if we maintain that annual vote.
RAY SUAREZ: And gentlemen, we'll have to stop it there. Thank you very much.