The Honorable Dennis Hastert
Speaker
U.S. House of Representatives
The Capitol
Room H-232
Washington DC 20515

Dear Speaker Hastert:

We applaud your decision to schedule a vote on legislation extending Permanent Normal Trade Relations (PNTR) status to China for the week of May 22. By doing so, you have moved American agriculture closer to the goal of capitalizing on the opportunities presented by the ground-breaking agreement defining the terms of China's entry into the World Trade Organization (WTO). This agreement, if fully and fairly implemented, will create significant prospects for U.S. agriculture. China will be subject to the rules and disciplines of the WTO upon completion of the accession process.

The agreement plays an important role in U.S. agriculture’s efforts to rekindle its exports to Asia. China, our fourth largest trading partner, is broadly recognized as the most important growth market for U.S. agricultural exports. While the United States gains access to its growing market, China does not gain any greater access to the U.S. market under the negotiated agreement, making it a win-win for American agriculture. Even now, China is implementing the 1999 Agreement on U.S.-China Agricultural Cooperation, and bringing U.S. meat, wheat, and citrus products into China.

The agreement with China will significantly improve market access for a wide variety of U.S. food and agriculture products, as well as for the tools of agricultural production. Indeed, the tariffs agreed to by China for many of these products are much lower than the corresponding tariffs in countries such as Japan and Korea. The agreement also will obligate China to reform its monopoly state purchasing agencies. It requires China to stop the subsidization of exports, which is a significant concession given the vociferous opposition we face from the European Union when it comes to the elimination of agricultural export subsidies. Finally, WTO membership will require China to play by the same rules and disciplines of the multilateral trading system as the United States. The United States will have recourse to WTO dispute settlement mechanisms should China not live up to any of its obligations, an avenue of recourse we currently do not have.

Some opponents of PNTR have argued that the Congress does not need to pass PNTR for the United States to obtain the benefits of China’s accession to the WTO. Those opponents claim that the 1979 U.S.-China Bilateral Trade Agreement will provide the United States with the same benefits as extending PNTR to China. This is simply not correct. Both independent legal analysis and the Congressional Research Service have determined that the 1979 Agreement is not a substitute for approval of PNTR. Without PNTR, the U.S. would not benefit from a long list of Chinese concessions that are crucial to ensuring real market access – e.g., trading rights; retailing, wholesaling and distribution services; advertising. U.S. exporters would not have the protection of the WTO Agreement on Sanitary and Phytosanitary Measures. The U.S. would not have recourse to WTO dispute settlement or any other meaningful enforcement mechanism; in essence, we would have to rely on other countries to enforce the rights our government negotiated. Moreover, the 1979 Agreement is temporary; it must be renewed every three years. Therefore, without the normalization of U.S.-China trade relations under the WTO, U.S. exporters could eventually lose even the tariff concessions in the accession package and face significantly higher border protection in the Chinese market than our foreign competitors.

This vote is not about ratifying the outstanding deal U.S. trade officials have negotiated, nor is it about China joining the WTO. The question before the Congress is whether U.S. farmers, workers, and businesses will be allowed to have the same access to China’s vast market as our competitors in Canada, the European Union and Japan will have when China joins the WTO. Thus, we implore the Congress to extend to China the same trade status we extend to other WTO members – Permanent Normal Trade Relations. American agriculture's long term financial health depends on a growing and open world economy. Bringing China into the WTO will contribute significantly to American agriculture's future prosperity.

Sincerely,

Ag Processing Inc.

Agribrands International, Inc.

Agricultural Retailers Association

American Crop Protection Association

American Farm Bureau Federation

American Feed Industry Association

American Forest and Paper Association

American Frozen Food Institute

American Meat Institute

American Seed Trade Association

American Soybean Association

American Sugar Alliance

American Vintners Association

Animal Health Institute

Archer Daniels Midland

Biotechnology Industry Organization

Blue Diamond Growers

Bunge Corporation

Cargill, Inc.

Cenex Harvest States

Central Soya Company, Inc.

Cerestar USA

Chocolate Manufacturers Association

CoBank

ConAgra, Inc.

ContiGroup Companies, Inc.

Corn Refiners Association, Inc.

Distilled Spirits Council of the United States

Elanco Animal Health

Farmland Industries, Inc.

Florida Citrus Mutual

Food Distributors International

Grocery Manufacturers of America

IMC Global Inc.

Independent Community Bankers of America

International Dairy Foods Association

Kraft Foods

Land O’Lakes

Louis Dreyfus Corporation

Mid-America International Agri-Trade Council

Miller Brewing Company

Monsanto Company

National Association of Animal Breeders

National Association of State Departments of Agriculture

National Association of Wheat Growers

National Barley Growers Association

National Cattlemen’s Beef Association

National Chicken Council

National Confectioners Association

National Corn Growers Association

National Council of Farmer Cooperatives

National Food Processors Association

National Grain & Feed Association

National Grain Sorghum Producers

National Grain Trade Council

National Grange

National Milk Producers Federation

National Oilseed Processors Association

National Pork Producers Council

National Renderers Association

National Sunflower Association

National Turkey Federation

North American Export Grain Association

North American Millers’ Association

Northwest Horticultural Council

Philip Morris International

Pioneer Hi-Bred International

Snack Food Association

Sunkist Growers

United Egg Association

United Egg Producers

United Fresh Fruit and Vegetable Association

USA Poultry & Egg Export Council

USA Rice Federation

U.S. Apple Association

U.S. Canola Association

U.S. Dairy Export Council

U.S. Grains Council

U.S. Meat Export Federation

U.S. Wheat Associates

Wheat Export Trade Education Committee

Wine Institute

ST. LOUIS OFFICE

WASHINGTON D.C. OFFICE