opening her own markets, until all of this is accomplished, we should not grant normal trade relation status to China or admit her into the WTO.

Thank you very much.

The CHAIRMAN. Thank you, Mr. Ellis.

[The prepared statement of Mr. Ellis appears in the appendix.] The CHAIRMAN. Next, we will call on you, Mr. Galvin.

STATEMENT OF CHRISTOPHER B. GALVIN, CEO, MOTOROLA, INC., SCHAUMBURG, IL

Mr. GALVIN. Thank you, Mr. Chairman, Senator Moynihan, members of the committee. Thank you for the invitation to appear before you on this important issue.

On behalf of Motorola's 140,000 employees around the world, I urge your swift approval of permanent normal trade relation status. We do urge that the committee and Congress reaffirm the trade relationship that has existed for 20 years and open the door to untold benefits for American workers, American farmers, and American companies.

PNTR is needed to lock in this agreement reached in November between the United States and China. That agreement was comprehensive in scope, providing greater market access for U.S. goods and services, lower tariffs, broad trading and distribution rights for every sector of the U.S. economy.

It creates enormous possibilities in China for U.S. high-technology companies. In fact, there is probably no other issue currently before Congress that will have a greater impact on the hightechnology community and America's ability to compete in the new economy, in particular, in that part of the world.

Let me make one point clear. PNTR is not a reward to China or a blanket endorsement of its policies, it is the right thing to do for America's economic and security interest. It is one of the best tools at our disposal to encourage further reforms in China and strengthen the trade rules governing our global economy.

On a more personal level, I would note that Motorola's presence in China dates back many years. In 1986, I joined with my father and another executive for a very extended trip through China to assess its future potential in our trade with China.

We met with numbers of Chinese officials at that time and we were left with a very clear impression that they were committed to a path of economic reform. Since then, Motorola has become the leading U.S. investor in China.

But make no mistake, we have done this with our eyes open. Our experience has not been without its challenges, whether it is related to China's economic transition or the ups and downs of our government's bilateral relations.

At the same time, I can report today that our decision years ago to engage with China has been an unqualified success for Motorola, for our employees, and the many American companies that support our operations there.

Mr. Chairman and members of the committee, it is essential that the world's most populous nation be brought under the umbrella of the organization that sets and enforces the rules of global trade.

Congress decides whether or not this happens with the involvement of the United States or without it. We should be clear that this is the choice. China will join WTO, but American workers and American business will only get the full benefit if Congress approves PNTR and we agree to treat China the same as any other WTO member.

Approving PNTR status secures a bilateral agreement that is good for American, good for China, and good for the future health and growth of the global economy. As stated earlier in this set of testimonies, Ambassador Barshefsky, Bob Cassidy, and their associates deserve extraordinary praise for delivering an agreement that gives enhanced market access, increased investment in telecommunications services, reduced uncertainty in the rules of U.S.China trade, and the promise of accelerating China's progression into a market economy.

The benefits of action are clear; so, too, are the risks of inaction. I, again, stress what this vote means. China will enter the WTO with or without our support this year. American companies and American workers will enjoy the benefits of China's accession only if China approves PNTR status.

Without that important step, America will be left behind as our foreign competitors and their workers exploit the new opportunities available to them, but denied to us in America as China enters WTO.

A vote against PNTR does not stop China's entry, but it does grant others the advantage that would weaken our position in the global economy for years to come.

Having sounded that note of concern, I want to say that I welcome the signs of bipartisan support evidenced in this committee for PNTR that have been made to date, and we look forward to further agreements to lock in the commitments that will bolster America's experts and extend China's economic reforms and strengthen the rules for more fair and open global trade.

By taking this step, Congress can help paint a brighter future for American companies, American farmers, American workers, and maintain America's competitiveness around the world.

Thank you.

The CHAIRMAN. Thank you, Mr. Galvin.

[The prepared statement of Mr. Galvin appears in the appendix.] The CHAIRMAN. And now it is a pleasure to call on Mr. Swain.

STATEMENT OF JEFFREY M. SWAIN, PRESIDENT AND COO, TOWNSENDS, INC., WILMINGTON, DE

Mr. SWAIN. Thank you, Chairman Roth, Senator Moynihan, and committee members. I appreciate the honor to have the opportunity to provide the poultry industry's view on the critical, important issue of U.S.-China bilateral trade agreement and the PNTR status of China.

I am Jeff Swain, president and chief operating officer of Townsends, Inc., with headquarters in Wilmington, DE, with poultry operations in Delaware, North Carolina, and Arkansas.

Townsends is both a member of the National Chicken Council, NCC, and the U.S.A. Poultry and Egg Export Council, USAPEEC.

It is my privilege to represent both of those organizations here today.

NCC represents companies that produce and process over 90 percent of the young meat chickens in the United States. USAPEEC represents member companies that account for over 95 percent of U.S. poultry and egg exports.

Together, these two associations work diligently to increase and expand the export market for U.S. poultry. They do so because the U.S. poultry industry recognizes that the economic health and viability of our business depends heavily upon capturing the stomachs and pocketbooks of 96 percent of the world's consumers who live outside our borders.

We strongly support the U.S.-China bilateral trade agreement and permanent normal trade relations status for China. Granting PNTR with China in their bid for accession to the World Trade Organization, as I explained in my following comments, the bilateral agreement and the future opening of the China market will have a very positive result, not only on U.S. poultry producers, but also all American agriculture.

For our industry, that is, companies that produce, process, and market poultry, exports are not an option, they are a necessity. About 16 percent of all U.S. chicken is exported. But, more importantly, the export market provides the opportunity to better balance the demand and the supply available from a live bird.

The primary example of this statement, is that the U.S. consumer has an overwhelming preference for breast meat, where, outside of our borders, the overall preference is for legs and leg quar

ters.

Thus, we can export the half of the chicken that we do not desire, while marketing the breast meat at home. This provides us with a very distinct, unique, and defensible competitive advantage of U.S. poultry versus all other competing countries.

Our industry is confident that the United States' largest poultry market, China, will also be marketing the best chance for continued significant growth. We believe in this positive outlook because the agreement terms truly do remove the major market impediments. With a fully implemented agreement, China is expected to grow our exports by 20 percent each year in the next 5 to 10 years. U.S. poultry exports to China, including transshipments through Hong Kong in 1999, were over $350 million. Adding 20 percent to this sizable market means substantially more income to all segments of agriculture involved in the chicken production process.

The Secretary of Agriculture, many years ago, referred to chickens as being condensed corn. [Laughter.] Chicken, of course, are much more than condensed corn, but the point is valid. When a metric ton of chicken is exported, it means that 50 bushels of corn and the meal from 20 bushels of soybeans are also exported.

Now, feed is the primary input in producing chickens, but there are many other inputs, including labor. USDA estimates that, for every 10,000 metric tons of chicken exported, that is 100 U.S. jobs throughout the linkage from farm, to the dock, to U.S. port.

Further, every dollar generated by the export sale multiplies by approximately 3.5 times throughout the agricultural and general

economy. That means that right now, our exports to China before this agreement employs at least 21,000 employees.

I can assure this committee that everyone in the poultry industry appreciates the importance of the international market and the opportunity to grow exports.

Secretary of Agriculture Glickman said that China's participation in the WTO will result in at least $2 billion per year of additional U.S. agricultural exports by the year 2005.

It is my belief that, as the Chinese consumers enjoy increased disposable income in the years ahead, there will be a greater propensity to increase the amount of animal proteins in their diet.

I speak to you on behalf of the U.S. poultry industry and request this committee's full support, and the full support of Congress, for the U.S.-China bilateral trade agreement and PNTR.

While I cannot officially speak for all American agriculture, I can without reservation characterize the support of American agriculture as strong, positive, and anxious to move forward.

To summarize, the U.S. poultry industry appreciates very much the ongoing interest and support of this committee to build world trade for U.S. agriculture for other parts of the U.S. economy. We look forward to our government moving forward in a very timely manner on the international trade issues in China.

Thank you for the opportunity to share our opinions.
The CHAIRMAN. Thank you, Mr. Swain.

[The prepared statement of Mr. Swain appears in the appendix.] The CHAIRMAN. Now it is my pleasure to call Mr. Van Andel.

STATEMENT OF STEVE VAN ANDEL, CHAIRMAN, AMWAY
CORPORATION, ADA, MI

Mr. VAN ANDEL. Thank you, Mr. Chairman. I am Steve Van Andel, chairman and CEO of Amway Corporation, a Michiganbased company that is known for its quality of products, as well as the use of the direct selling system, where we have millions of distributors around the world who operate businesses of their own.

I also represent today the U.S. Chamber of Commerce, where I serve as a board member, integral in developing some of the international policies of the board of the Chamber.

The US. Chamber is the world's largest business federation, with over three million small, medium, and large businesses around the country. We have long advocated normal trade relations with China on a permanent basis.

The historic market opening agreement brings China into the World Trade Organization and demands that we consider the permanent normal trade relations for China under this context.

Unless we grant China PNTR, once it becomes a WTO member American businesses, workers, and farmers will not receive the benefits of the agreement, but our foreign competitors will.

The U.S. Chamber has launched a nationwide, grass roots initiative called Trade Roots, aimed at increasing public understanding of the benefits to the United States of expanded trade with China. The Chamber support for this agreement and the permanent normal trade relations is outlined in my full statement, but I am not going to repeat that. I would like to take this time, however, to make a few personal observations.

I think the first time I went to China was over almost 30 years ago, and I have made numerous trips there since. Particularly, I have noticed in the last four or 5 years some changes.

I have noticed the political atmosphere has changed, where the government is now relaxing more and more and it is ever increasing the number of officials who are willing to experiment with free market processes. I have also noticed that the improvements that come as a result of that are improvements to the lives of the people in China.

Some critics argue, I guess, that by granting China permanent normal trade relations, the Congress will lose leverage over China. They claim that the annual normal trade relation debate is useful and a way to prod China into improving its record on human rights and religious tolerance. But from my experience and observations, I would say that I really do not accept that thesis.

China is changing because the people of China are asking for the change. They are demanding the change, and the government is responding. They are responding cautiously and slowly, and maybe too cautiously for some, but they still are responding.

One of the forces driving these changes is the experience of those Chinese citizens who are working for U.S. companies. Amway and other U.S. firms that are operating in China have established high standards for personnel management, corporate citizenship, fairness, and equal opportunity. These experiences, and others, are demonstrating to all in China that they should open their doors to the world to become part of the international community.

In this regard, it is important to note that China wants to adopt international standards. Those that believe that progress in China has resulted from the unilateral pressure by the U.S. Congress are missing a key point, in that paternalism, or colonial dominance, really is counterproductive.

By their focus on international standards, Chinese officials are saying to us that they are going to strive to meet standards that apply to the United States as well.

I was in Beijing on Monday and met with Chinese officials, and they made it very clear that China is proud of its sovereignty and its independence, but that it recognizes it must adhere to a set of rules that are the same for all nations. They recognize, too, that this means that U.S. business will have the right to export to China, and they confirmed that to me.

They made additional points, I think, that are worth noting here. U.S. business has suffered in China, partly because of the uncertainty that the annual normal trade relations argument creates. The annual debate in Congress creates the uncertainty of whether or not the U.S. business will actually have the same trade relations on a year-to-year basis.

They added that China is now offering that permanent normal trade relation status to us. To take advantage of it, however, fully, under the WTO rules, U.S. business needs assurances from the U.S. Congress that they will grant permanent normal trade relation status.

I asked them what might happen if the U.S. Congress refuses to grant PNTR to China on a permanent basis, and their answer was unequivocal: China would join the WTO. They also made it clear