Minnesota Governor Jesse Ventura

Testimony Before the House of Representatives
Committee on Ways and Means

Congressman Ramstad, Mr. chairman and Members of the Committee, thank you for the opportunity to be here today to testify in favor of China's participation in the WTO and permanent normal trading relations with China. It is a sincere honor to represent the state of Minnesota before the Ways and Means Committee.

That said, let me start by declaring what I am not.

I'm no trade expert. I don't speak Chinese and I've never negotiated an international trade deal. They didn't offer international trade relations at Roosevelt High School in Minneapolis.

What I do bring to you today is a dose of common sense.

China's participation in the WTO and permanent normal trade relations between China and the United States is the number one marketing opportunity of the 2lst Century, and it's being handed to us on a silver platter.

To join the WTO, China has made one-way concessions across the board in agriculture, manufactured goods, services, technology and telecommunications I like the idea of all countries playing by the same rules, and I like the idea of 134 countries joining us to shake one worldwide finger at China if they break international trade deals. That's essentially what the WTO will allow.

There is a Chinese saying that says "One hand can't block the sun." Not my hand. Not the hand of Congress. Not the President's hand. China is going to trade in the international marketplace with or without our stamp of approval. We alone cannot prevent China from entering the WTO and trading with everybody else.

If Congress votes down this agreement, China will still enter the WTO but won't have to live by the rules we've negotiated. Obviously, this would put us at a disadvantage and would cause our U.S. companies to be treated as second class citizens.

Closed doors don't work We've tried that. For 45 years we've had an embargo to prove that we don't like how Cuba does business. Well the joke's on us. Castro has outlasted nine going on 10 presidents. While embroiling ourselves in controversies over little children, communism remains.

Markets are shut to our agriculture products, and we haven't impacted improvements in human rights.

Let's not let that happen here. Enough about Cuba - that's for another day. I'm here to tell you who cares about this China issue in Minnesota.

Farmers care. Business- both big and small - care. And, finally, a lot of ordinary people with common sense care.

Farmers care, because as Minnesota's agriculture leaders told me, this agreement is the single most important step we can take to improve market opportunities for agriculture. And the farm economy could use a boost right now.

Farmers want to be self-sufficient. They don't want to rely on government subsidies. They want the right to market their products and get a fair price and profit. Free trade, more than anything else we can do, gives them that chance.

Producers are also interested in PNTR for China and China's participation in the WTO because they are tired of being the pawn in the game of international relations, time after time, U.S. foreign policy negotiates trade deals that are often on the backs of America's farmers. Such and such a country does something wrong, so our wheat or soybean or corn or livestock producers can't export there. This gets old. Here's an opportunity to right those wrongs of the past and do something positive for American agriculture trade.

Let me tell you more about Minnesota farmers and their common sense thinking on this issue:

The US Department of Agriculture (USDA) projects that in the next century, Asia will account for 75% of the growth in U.S. farm exports, 50% of this growth will be to China. China has 7 percent of the world's arable land to support 20% of the world's population. They need our food.

Nathan from the Corn Growers- sitting right here in the front row - told me that USDA projects China to be a net exporter of corn this year. Their high export subsidies allow them to offer cheap corn on the international market. This agreement will change that. It will allow the US to export 177 million bushels of corn in the first year and China will have to drop export subsidies. Not only will our corn exports to China increase, but US corn will be very competitive in markets that have been buying subsidized Chinese corn. This means about $3 billion to our corn producers. That's not pocket change.

Our pork producers think this is a pretty good deal, too. Chinese people consume far more pork than any other country, but right now its markets are practically closed. Minnesota pork is a highly competitive product coveted around the world. When China joins the WTO, it will lower its tariffs on pork from 20 to 12%, with no quantity limits.

Minnesota is the nation's 3rd largest producer of soybeans, and China is the worlds largest growth market for soybeans. According to the Minnesota Soybean Growers Association, China's 1.3 billion people have a per capita consumption of only 4.75 lbs. of soybean oil annually. In Taiwan, the average per capita consumption is 47 lbs. If China's consumption were to grow to Taiwan's level, it would need almost 6.8 million metric tons more. That's equivalent to the oil in almost 105 million metric tons (3.86 billion bushels) of soybeans. That's 46% greater than the entire US soybean crop in 1999.

And, the Chinese like to drink beer, and that's a good thing for our barley growers. Under this agreement the 30% tariff on barley will decrease to 10%. The US Grains Council forecasts Chinese imports of malting barley will double to more than 91 million bushels in this decade. As the nation's 5th largest producer of barley, this market is critical to Minnesota.

And have you ever heard of the Chicken Council? Minnesota is the number one turkey producing state in the country and China is the United States' largest export market for poultry. The Chicken Council and the Turkey Growers think that China could easily become a $1 billion market in a few years, if this agreement comes to fruition. Right now, poultry must go through Hong Kong. After PNTR, direct exports to China will be allowed. We grow 180,000 birds per day. Well. Minnesota's producers see the benefits of opening a market to one point two billion people who eat their product.

There have also been recent negotiations to open the market for fertilizer and I urge the negotiators to resolve this fertilizer issue now so that Minnesota fertilizer companies can compete on an open, level playing field in the Chinese market.

There is a multiplier effect for agriculture. Supply and demand drives the market. China wants our poultry. We increase production of poultry, that in turn increases the demand for corn and soybeans to feed those birds. It also increases the processing needs here on American soil.

In summary, agriculture tariffs will be cut in half.

Second- business cares.

I talked to the CEO of a Minnesota company called Pemstar. I know full well that this town is full of people who are glued to these phones. Well, Pemstar makes these. Now every time you make a call, you can think of Minnesota.

Pemstar recently hired 15 to 20 new workers in Minnesota just to support their growing operation in China.

They Want to see this agreement happen because under WTO, China will totally get rid of its tariffs on many computer-related products.

This deal is about forging a relationship that spans the Pacific for the good of our economy.

It's about individual companies in Minnesota and around the nation who want to export because experience tells us that exports make for healthier companies.

Firms that export experience 20% faster employment growth than those that don't. They pay 13-18% higher wages and salaries and they provide 11% higher benefits than companies that don't export. These firms are 30-50% more productive because they are leaner and more competitive, more innovative, and more technologically advanced.

Two hundred twenty-eight (228) Minnesota companies exported to China in 1997. Over half of these firms have less than 500 employees. We're talking about small and medium-sized companies here, not just big business.

Finally, why do everyday Americans care about this bold move?

Because, simply, it makes common sense.

Don't sell our citizens short. They know that the world is a small place in this high tech world.

Ordinary Americans probably don't pay a lot of attention to what happens in this Committee, or to what happens at the State Capitol in St. Paul.

Most normal people are too busy working, paying their bus, checking up on who their kids are talking to over the Internet and watching the NCAA basketball tournament to care about PNTR with China. But when they stop to think about it, and I challenge the American people to stop and think about it, I believe that they'd say "vote yes."

Why? Because people want a better life for their children They want their kids to have access to better jobs than they have, and they want to see our economy continue to grow.

Improvements in China's economy also makes China a more stable part of the international community and opens their minds to our free market ideals and democratic values.

And to those who say this agreement is a problem for human rights, I ask you, whose human rights are you talking about? I met with a group of Chinese students who are studying at the University of Minnesota. Currently, our very own University of Minnesota has the largest population of Chinese students and scholars in the United States, numbering 1200. These students estimate that ninety-five percent of Chinese people back home want to see this happen.

Why? Because they want the ability to have access to our food, our technology, and our culture. China experienced one of the biggest famines in this century. More than 20 million people died in three years of famine. They remember what it was like to have their market closed to outside sources of food.

We don't have to APPROVE of their human rights to help IMPROVE them. Opening their doors to our business practices, our culture, our democratic ideas will open their process.

The old way of dealing with China hasn't worked. Despite your yearly review, there are still human rights abuses in China. I think we can all agree that structural changes within China will be necessary to change China for the better in the long term. Year-to year debates on how they're doing won't give us the structural changes that are needed inside China. If we slap their hand by putting restrictions on this agreement, we'll hurt China but we won't injure them. We might embarrass them, but we won't empower them to change.

The Chinese students at the University of Minnesota also told me their concerns. They know that this change to a free-market economy will not be easy. Reforms will be painful. But the Chinese people are willing to hurt in the short term because they know that this will benefit them greatly in the long term. The true judgment of this agreement will come in 10 or 20 years.

Finally, why should I, as governor of Minnesota, care about this trade agreement?

Cause Minnesota is going global. And I don't want protectionist feelings in Congress to stand In the way of progress for Minnesota.

I can't speak for other states, but I can tell you that Minnesota is already a world competitor. Among nations, we would rank 28th in economic output in the world if we seceded from the Union. We have the guts and the confidence to compete on the world stage.

I urge you, Mr. Chairman and Members of the Committee, to take into consideration the opinions of the vast majority of middle Americans on this topic. The far right of the right - and the far left of the left - aren't going to be convinced. Don't waste your time.

If you don't forge ahead to open China's markets, rest assured the window of opportunity will be lost. The Europeans would like nothing better than for the US Congress to continue fussing over this agreement. I urge you not to let that happen. Let America be the first in line to reap the benefits of this trade agreement. It's the most important step you can take to boost our economy in the new millennium.

We don't have time to sit here and watch the world's partners go on trading without us. I've traveled the world in my prior life, and my trip to Japan since the election will be followed by a trip to China.

I've watched the world become smaller over the years, and I came to this job as Governor of Minnesota determined to leave my state positioned to seize the day.

Please help me by saying yes to China.

Thank you.