Sen. Phil Gramm, chairman of the Senate Committee on Banking, Housing and Urban Affairs, made the following comments today as part of his floor speech in support of HR.4444, a bill that would authorize the president to establish permanent normal trade relations with the People's Republic of China:

I have seldom had an opportunity to speak on an issue or to vote on legislation that I think is more important for the future of every American and more important for all the people who live on this planet than the issue of establishing normal trade relations with China.

Why is this vote so important? The vote is so important because in 1948 China was one of 23 nations that shared our dream of an open world with relatively free trade. Then in 1949 they turned to the dark side, and the Chinese people paid a terrible price for that decision. Today, 52 years after helping to found what now is the World Trade Organization, China is back knocking on the door, in essence saying we did the wrong thing by turning to the dark side 51 years ago, and now we want to come back and join the rest of the world in the free exchange of goods and services.

This is an important occasion, it seems to me, because we have to answer the question: Are we going to open the door or are we going to slam the door in their face?

For our colleagues who say they object to religious suppression in China, so do I. I object to it, and that is one of the reasons I am for normal trade relations with China. I believe that based on all of our historic experience, trade will change China. The ability of people to trade and, in the process, to experience prosperity and have the economic freedom that comes from the ability to buy American products, to know the joy of wearing cotton underwear made out of Texas and American cotton, to get the ability to own stock in America, to get the ability to own bank accounts denominated in U.S. dollars -- all of that is provided in this agreement.

Once you have a bank account with U.S. dollars in it, you are fundamentally changed forever. You want your right to have your say, and you want the right not only to make decisions in your family, but you want the right to ultimately affect decisions of your country, and you want the right to worship God as you choose. When you have economic freedom and the prosperity it brings, you ultimately have the power to get religious freedom.

Many of our colleagues say that the Chinese do not respect workers' rights, and they do not. If one was going to judge this agreement based on how workers are treated, how do you expect a country to treat workers when most people work for the government? How do you think this country would treat workers if we all worked for the government? Workers end up being treated well because they have opportunities, because if they do not like how they are being treated on this job, they can quit and go to work somewhere else.

I am not here to argue today that we ought to agree to normal trade relations with China because China treats its workers well. I am here to argue for normal trade relations with China because if we have normal trade relations with China, workers will be treated better because they will have more opportunities, they will have more freedom.

There are some people who oppose normal trade relations with China because China does not protect its environment, or because China makes decisions about its environment to which we object. If you really care about the environment in China -- and they are part of the environment of the planet on which we live -- you should be for this agreement because what poor country protects its environment? What country with a per capita income of $790 a year has the luxury of being concerned about its environment? I can answer that. None.

The question is not what China is like today; the question is what will China be like tomorrow. The answer will be based on what we do in terms of either opening this door to let them into the world of trade, or slamming the door in their face.

There are other people who say if we let China in, ultimately it is going to mean that when we go to Wal-Mart, shirts are going to be cheaper, sweaters are going to be cheaper, clothing is going to be cheaper, implements are going to be cheaper, and that is a bad thing because they could be made in America. I reject that. I think it is a plus. I thank God every day that people can go to Wal-Mart and buy clothing that is inexpensive. The Chinese can produce quality goods that the people of Texas want to buy. I believe in freedom, and part of freedom is the right to buy something if it is legally traded and if it benefits your family.

What do we get from these agreements? We have heard a lot of talk about the fact that we get a 17 percent reduction in average tariffs on agriculture. I can assure you that is going to be good news for our corn producers in Texas. It is going to be good news for our cotton producers. We believe that as the Chinese get an opportunity to eat Texas beef, they are going to like it, and as their income grows, they are going to want a lot more of it.

We also believe that lowering industrial tariffs in China from an average of 25 percent to an average of 9 percent is going to be a dramatic boon to U.S. manufacturing, especially the manufacturing of high-quality items in high-wage industries, such as our high-tech industries. We believe we will benefit.

As chairman of the Senate Banking Committee, I wish to touch on three other industries that are also going to benefit. My colleagues know that we in America produce financial services better and more efficiently and more abundantly than any other country in the world. Needless to say, this is a high-wage industry. It is one in which we dominate the world, and we want it to continue. I will touch briefly on a couple of these industries.

In the insurance market in China today, there is an ad hoc system where U.S. and foreign insurers get a license to operate based on political favor, on good fortune, or having been there first. And as an insurer, you have very real limits on where you can sell your products.

Under the November 15 U.S.-China agreement, China will grant licenses without quantitative limits or needs testing to qualified foreign insurers. American insurance companies will be able to sell in China. And China's geographic limits on where foreign insurers can sell insurance products will be phased out over a three-year period.

It seems to me that if anything ties us together and promotes peace and trade, it is having people in China be able to invest in American insurance companies, or buy IRAs, or enter into 401(k) retirement programs where the money is invested in the United States of America and around the world. Clearly we all benefit from that.

Today, foreign banks in China can engage in commercial banking only if they are located in 20 specific cities. Foreign banks can only offer banking products in foreign currency. That means that for most people in China, they do not have access to American banks. It's an extremely limited ability to operate. Basically, what foreign banks have to do is to get Chinese partners, which means they basically must give part of their business away for the right to operate in China.

But under the November 15 agreement, all geographic restrictions on foreign banking in China will be lifted within five years. American banks will be able to own 100 percent of their banking operations in China. And within five years, American banks will be able to do banking business in Chinese currency.

I cannot imagine how the world won't be better off when people working in China can bank in American banks, and use American banking products. If that is not the essence of freedom, I don't know what is.

It's a similar story for our securities industry. Today, there are very real limits on American securities firms' activities in China, and on the ability of U.S. companies to invest and to have clear operating ownership. Those restrictions will be significantly modified for the benefit of our industry as well as the Chinese.

To sum up, with the implementation of the November 15 agreement and the adoption of this PNTR legislation, the American financial sector as well as our industrial and agricultural sectors will have an extraordinary opportunity to compete in a growing market of 1.2 billion consumers.

It is seldom in the Senate that you vote on something that represents history in the making. A lot of what we do here -- and a lot of what everybody does in every job in the world -- is a bunch of little things about which they don't necessarily get excited. Today, we have an opportunity to work on something that is critically important, something that will dramatically improve the world in which we live.

I am very strongly in favor of the pending PNTR legislation. I am opposed to amending this legislation. There are many good ideas for amendments, but the bottom line is this is something that is important. This is something that is historic. We need to get on with it, without tacking on amendments.