Copyright 2000 Newsday, Inc.
Newsday (New York, NY)
May 23, 2000, Tuesday NASSAU AND SUFFOLK
EDITION
SECTION: BUSINESS & TECHNOLOGY; Page A46
LENGTH: 951 words
HEADLINE:
CHINA TRADE VOTE IN THE SPOTLIGHT
BYLINE: By James
Toedtman. WASHINGTON BUREAU CHIEF
BODY:
Congress expects to vote this week on whether to establish a
permanent normal trade relationship with China. This would end
the routine of extending normal trade status in annual votes and would allow
U.S. business to capitalize on an agreement signed last November that
dramatically drops tariffs for American goods shipped to China, and facilitates
investment and operations by U.S. firms in China. The issue has prompted a
fierce and expensive lobbying effort pitting organized labor, human-rights
activists and environmentalists on one side and an alliance of business groups,
the Clinton administration and congressional Republicans on the other. Both
sides agree that it is probably the most important issue Congress will vote on
this year.
Treasury Secretary Lawrence Summers goes further to say that
in 50 years, it will be the only vote by this Congress mentioned in the history
books.
Here is a synopsis of the stakes, some background and some key
arguments.
Q. What is Congress voting on?
A. The House and then
the Senate will consider President Bill Clinton's request to amend a Cold
War-era law, the Jackson-Vanik amendment to the 1974 trade act, which requires
annual review of trading partners based on freedom of emigration. The House bill
will also include provisions for a new commission that would annually examine
China's human-rights record. Permanent trade relations is an underlying tenet of
the World Trade Organization, the 134-member agency that monitors trading rules
and mediates trade disputes. Rejecting that request will not block China's entry
into the WTO. But it will prevent U.S.companies from benefiting from tariff
reductions negotiated with the Chinese by the U.S. trade officials last
November.
Q. Why are U.S. businesses so interested in this?
A.
With a market of 1.2 billion people, the stakes are huge. The United States
allows imported products from China, but China has set high tariffs and
restrictions barring most U.S. firms from operating in China or exporting their
products there. While U.S.-China trade has risen over the past decade from $ 10
billion to $ 90 billion, the value of goods imported from China is six times
higher than the value of U.S. exports to China. In return for receiving normal
trading status with the United States, China agreed to reduce its tariffs and
restrictions against imports. Auto tariffs fall from nearly 100 percent to 25
percent by 2006, and tariffs on telecommunications equipment are eliminated.
Insurance and financial services firms can operate throughout the
country, and U.S. firms can own up to 49 percent of mobile telephone and
communications firms by 2006. But the key attraction is the size of the Chinese
market. New York Life insurance officials say, for example, that attracting 1
percent of China's population would double their customer base.
Q. Why
the opposition?
A. Opponents include organized labor, environmentalists
and human- rights activists-from Catholic bishops, the Sierra Club, the National
Farmers Union and Friends of the Earth. Trade accounts for nearly 30 percent of
the U.S. economy, and has generated as many as 16 million jobs. But labor
leaders argue that more domestic jobs have been lost or relocated to other parts
of the world where labor costs are less, particularly in China, where some
workers earn as little as 13 cents an hour.
China's leaders also say
they hope to convert a centrally controlled economy to a market-driven economy,
but the transition will not be easy. Further, China has ignored U.S.
restrictions and sold to Iran missile technology that could be used to launch
nuclear weapons, it has obtained U.S. military secrets, and it has threatened
military action against Taiwan, which has long been an ally of the United
States. Supporters of the exiled Dalai Lama also criticize China's expansion
into Tibet at the expense of Tibet schools and culture. And environmentalists
say that Chinese development has not been environmentally friendly.
Q.
How does the Administration respond?
A. President Clinton, business
leaders and Republican leaders from former presidents Gerald Ford and George
Bush and likely nominee Texas Gov. George W. Bush say that rejecting the trade
deal would be to allow allies to benefit from the agreement the United States
negotiated and would risk isolating China and destabilizing Eastern Asia.
Q. How can the United States rationalize its traditional concern for
human rights with China's record of repression?
A. This may be the most
contentious aspect of the agreement. U.S. officials say evidence of repression
has actually increased in the past year. Chinese dissidents like Harry Wu and
Wei Jingascheng, who each were jailed for nearly two decades and exiled from
China, have met with dozens of members of Congress, giving dramatic testimony to
the record of oppression. Today, Chinese officials continue to intimidate
Internet entrepreneurs, restrict the use of the Bible and arrest members of the
Falun Gong meditation group. Nearly 100 members of the sect were arrested at
Tiananmen Square while a group of U.S. members of Congress were visiting last
month.
Opponents of normalizing trade say that granting
permanent normal trade relations would be viewed as a reward by
Chinese officials and as evidence that the United States tolerates ongoing human
rights abuses.
They prefer the current practice of requiring an annual
vote. Proponents say that the best way to change China's policies is to engage
it in the world community and to expose its people to U.S. products and U.S.
values.
LOAD-DATE: May 23, 2000
