The Senate Finance Committee is reviewing the differences between the House measure and its own version that did not include human rights or import provisions. The full Senate is expected to vote on PNTR legislation later this summer where passage is likely.

LEGISLATIVE BACKGROUND: 1999 U.S.-China trade negotiations resulted in a bilateral agreement to end China’s sanitary and phytosanitary barriers to US wheat, meat, and citrus exports, reduce tariffs and expand market access quotas as a prelude to China’s accession to the World Trade Organization (WTO). In exchange, China would receive permanent trading status similar to that provided other U.S. trading partners who are members of the WTO and would no longer be subject to an annual review process of its trade practices and other activities that has existed for the last 20 years. PNTR proponents successfully argued that trade issues as well as human rights, environmental, and labor concerns regarding China can be addressed through a process of inclusion of China in the WTO.

The European Union (EU) concluded a trade agreement with China last week ensuring the EU’s support for China to join the WTO.

PENDING LEGISLATION: S. 2277, a bill to terminate the application of title IV of the Trade Act of 1974 with respect to the People’s Republic of China, approved by the Senate Finance Committee on May 17, 2000, by a vote of 19-1.

NATIONAL FARMERS UNION POSITION: In an April 3, 2000 letter to Congress, the National Farmers Union identified critical components of a “trust but verify” policy toward trade agreements with China. The NFU position required the adoption of provisions to verify Chinese compliance with all terms of the agreement. In addition, it would have retained authority for the U.S. to unilaterally respond to compliance violations and established a mechanism to compensate agricultural producers for economic losses due to import surges or reduced market opportunities due to unfair trade practices, including currency variances and fluctuations. These issues were viewed as an opportunity to establish a fair agricultural trade agreement with China that would benefit American producers. The House legislation did not sufficiently address the key issues raised by NFU membership, therefore the NFU opposed passage of the House version of PNTR for China.