U.S. State Department Geographic Bureaus: East Asia and Pacific Bureau

U.S. DEPARTMENT OF STATE
95/03/08 TESTIMONY: W. LORD ON IPR AGREEMENT
BUREAU OF EAST ASIA AND PACIFIC AFFAIRS

Testimony for
The Senate Foreign Relations Committee
Asia and Pacific Subcommittee
March 8, 1995

Winston Lord
Assistant Secretary
East Asian and Pacific Affairs
Department of State

Introduction:

Mr. Chairman, thank you very much for the invitation to speak before the Asia and Pacific Subcommittee of the Senate Foreign Relations Committee. Before I begin, may I extend congratulations to Ambassador Barshefsky, Ambassador Kantor and the entire negotiating team for the firm and principled way they conducted extremely difficult negotiations which ultimately yielded an excellent IPR agreement. I am very pleased to have this opportunity to sketch out in broad terms how the IPR Agreement Ambassador Barshefsky has just described for you fits into our overall strategy of "comprehensive engagement" with China.

This Administration, and we at the State Department, are committed to working closely with you in order to shape a strong bipartisan policy that will advance our broad spectrum of interests in China.

A Diverse and Complex Relationship:

Since we established formal diplomatic relations with the People's Republic of China in 1979, the scope of our ties with the world's most populous country has expanded significantly. Two countries with international interests and influence as extensive as ours must be engaged with each other on a very broad range of issues, in the interest of long term regional and global peace, prosperity, and security. The IPR Agreement is the most recent demonstration of the complexity of this relationship, and its increasing importance.

Pursuing the interests of the United States is of course the fundamental premise of our China policy. We have just advanced our interests in the IPR negotiations. In trade and other areas, we must apply this yardstick in addressing the entire constellation of bilateral, regional and global concerns in which our countries' interests intersect.

Comprehensive Engagement:

It is in this context that this Administration developed and the President approved a strategy of "comprehensive engagement" with China. The purpose of this strategy can be simply stated:

o to pursue all of our interests at the levels and intensity required to achieve results;

o to seek to build mutual confidence and agreement in areas where our interests converge; and

o through dialogue, to reduce the areas in which we have differences.

In short, we bear in mind that, as the President has stated, the U.S. national interest is served by maintenance of friendly relations with a China that is strong, stable, prosperous and open.

We sometimes hear sincere criticism that this policy approach can lead to apparent inconsistencies, misperceptions, and skewing of what should be our top priorities. There are those who contend with passion and conviction -- which we understand and fully respect -- that if China fails to address our concerns on a particular issue, then we should put our other interests and objectives on hold until we have seen progress.

This Administration believes, however, that in dealing with a country as large and as important as China, it is essential to continue pushing our interests forward on as many fronts as possible. In areas where the two countries' interests conflict, the going may often be slow. But there are also many areas where U.S. and Chinese interests are complementary and where constructive cooperation between us produces significant benefits for both countries, and also contributes to regional and global peace and security.

Human Rights:

Our attention is often focused, quite naturally, on areas of obvious disagreement. The human rights issue is a case in point. This Administration and the American people remain extremely concerned with China's continued failure to meet internationally-accepted standards on human rights, including norms that have been recognized by Beijing itself -- for example, in the Universal Declaration of Human Rights.

When the President decided last year to de-link human rights from MFN, he made it clear that de-linkage represented a shift in the tools we will employ to achieve progress on China human rights issues -- it did not represent a shift from the Administration's continued stress on human rights. This stress has been clear in Geneva, for example, where we have joined the European Union, Japan and others in a concerted effort at the U.N. Human Rights Commission to put the spotlight on China's human rights abuses.

We are likewise pressing a bilateral dialogue with China on human rights issues, addressing such areas as prisoner releases, Tibet, and visits by international humanitarian organizations to Chinese prisons. We have begun to discuss with the Chinese how we can help to strengthen legal reform efforts in China, and the establishment of a stronger judicial system. Supreme Court Justice Kennedy's recent visit to China was very helpful in this regard.

Improvement in Chinese human rights practices is an essential element of our China policy and, indeed, of our efforts to achieve a stable long-term U.S.-Chinese bilateral relationship. That is why Administration officials visiting China without exception raise our human rights concerns. And it is why concentrated attention to our human rights agenda remains a central aspect of our "comprehensive engagement" strategy.

Our Broad Goals in Economics and Trade:

Our increasingly important economic and trade relations with China are another key aspect of this "comprehensive engagement" strategy. Ambassador Barshefsky has just described for you the recent round of very tough negotiations on the protection of intellectual property rights. Just two months ago, we and many of China's other trading partners, large and small, participated in a separate, but equally grueling, talks related to China's accession to the World Trade Organization.

The IPR and WTO negotiations must also be viewed in the context of our broader strategy of "comprehensive engagement." In economics and trade, this strategy has two key elements:

o First, we seek to fully integrate China into the global, market-based economic and trading system. China's participation in the global economy will nurture the process of economic reform and increase China's stake in the stability and prosperity of East Asia.

o Second, we seek to expand U.S. exporters' and investors' access to the Chinese market. As China grows and develops, its needs for both goods and services imports will grow even more rapidly. This market represents a very important opportunity for U.S. firms and workers.

Clearly, the IPR Agreement contributes directly to our efforts to develop commercial opportunities for U.S. firms in China and elsewhere. In bringing China closer to international norms in this area, the IPR agreement also promotes China's eventual integration into the global, market-based economic and trade system.

The IPR agreement could also help to generate momentum for further progress on China's accession to the WTO. The negotiations demonstrated that, when all sides are determined to seek mutually acceptable solutions through serious and detailed talks, agreement is always possible. We hope that this pattern will be applied with equal success in China's WTO accession process.

The IPR agreement is a large step forward; but many other important substantive issues remain to be resolved in order to complete the WTO accession process. Here, too, much will ultimately depend on China's willingness to accept the basic obligations of the WTO system.

At the same time, we continue to pursue our "comprehensive engagement" strategy in other aspects of our economic relations with China. Recently, for example, we have concluded agreements with China on textiles and satellite launches. This year, we will be engaged again in talks on market access, civil aviation, export financing, and a variety of other commercial issues.

We also continue to expand our export promotion efforts - one of the central responsibilities of what Secretary Christopher refers to as our "America Desk" - and cooperative programs in scientific and technical fields. For example, during Secretary O'Leary's visit to China two weeks ago, we not only witnessed the signing of commercial agreements that will facilitate billions of dollars in new U.S. exports, but also established the framework for scientific, technical and economic cooperation in developing China's sustainable energy development program. Secretary Brown's visit to China last August was equally successful in helping to build long-term economic and business ties between China and the United States.

Our Security Interests:

An increasingly powerful China will be a central factor in the stability of the Asia-Pacific region. Indeed it will play an important role in global security given its permanent seat in the United Nations Security Council, its possession of nuclear weapons, and its military exports.

Thus we also seek to gradually develop our exchanges with Beijing in the security field. Under Secretary Perry's leadership we have launched a careful program of military exchanges and defense conversion cooperation. This is designed to promote greater transparency about China's intentions and strategies, establish ties with an important sector in China, and contribute to progress on the non-proliferation front.

At the same time, we are seeking to integrate China in the Asia-Pacific Security realm. We have welcomed its participation, and are working with it, in the Asian Regional Forum and Northeast Asia Security dialogue. Moreover, we have closely coordinated on some regional security issues. Beijing has played a generally constructive role on Korea. It has ceased assistance to the Khmer Rouge and is dealing with the elected government of Cambodia. Its role in the South China Sea will be critical.

Finally the control of weapons of mass destruction is a key agenda item with the Chinese. There is unfinished business with respect to China's adherence to the Missile Control Technology Regime. Chinese military exports in certain other areas remain worrisome. There are grounds for hope that China will support the indefinite extension of the Non-proliferation Treaty and a Comprehensive Test Ban Treaty, though we oppose China's continued nuclear tests in the meantime.

Conclusion:

Mr. Chairman, China is a large, populous, militarily powerful and economically significant country whose influence in the world cannot but increase. China's policies, attitudes and actions will have an impact upon a broad range of U.S. interests, including those in the political, security, non-proliferation and human rights areas, as well as in economic and commercial affairs. Managing this complex relationship will require sophistication, patience, much hard work, and a steady vision of our long term interests. Given our different perspectives, we must be prepared for inevitable rough patches in our relations.

Against this backdrop, we believe that the President's strategy of "comprehensive engagement" is the best way of furthering the broad range of U.S. interests in China, East Asia, and the world. We hope that our approach will enjoy broad bipartisan support in the Congress.

Thank you.

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