Opposing China's NTR: bad for business - US to offer China Normal Trade Relations status - Brief Article

Discount Store News, March 6, 2000 by Bob Verdisco

Last April, the United States and China finally reached an agreement on China's accession into the World Trade Organization. It should have been a cause for widespread celebration by American manufacturers, exporters, retailers, importers, consumers and workers. Curiously, not everyone saw it that way.

Violent protests at the WTO ministerial meeting in Seattle--orchestrated mainly by organized labor, human rights advocates and environmental activists--cast a cloud over the prospects for bringing China into the global community.

In the coming months, Congress will consider a long slate of trade legislation, and granting permanent Normal Trade Relations (NTR) status for China is at the top of the agenda.

Anti-trade activists, encouraged by what happened in Seattle, plan to keep the pressure on Congress to defeat permanent NTR. The AFL-CIO, once again citing the loss of American jobs, has announced that it will mount a massive lobbying effort to defeat the measure. These are the same folks who last year helped defeat efforts to grant the President fast-track authority. Their efforts, however misguided, constitute a serious threat.

IMRA has launched an intensive education and lobbying effort, including testimony before the House Ways and Means Committee, to ensure that permanent NTR passes. Other business groups have also joined the fight. It's critical that mass retailers pull out all the stops and urge their representatives to support the measure.

This would seem to be the least controversial trade issue of all--a "no-brainer" in fact. China's full WTO membership will bring unprecedented benefits to U.S. businesses and consumers. American businesses would own their distribution chains in China, allowing companies to put their own products in Chinese stores. Consumers would continue enjoy access to high-quality, value-priced Chinese goods.

But for the United States to realize these benefits, Congress must grant China permanent NTR status. Failure to do so would mean continuing the divisive annual reviews of China's trade status, giving China legal grounds to negate key WTO market access concessions. Fourteen years of negotiations would go down the drain.

Because China has received NTR on an annual basis since 1980, U.S. tariffs would remain exactly the same if permanent NTR were approved. In contrast, failure to extend permanent NTR would cause tariffs to skyrocket, eventually driving up costs to consumers.

Each time I encounter news about the opposition to free trade, I shake my head in wonder: What can these people be thinking?

Those concerned about human rights and environmental issues seem to be suffering from a kind of near-sightedness. Do the protestors really think that conditions will improve if China is excluded from the global economy?

Isolation doesn't work. Forty years of political and economic isolation have failed to bring about democratic reforms in Cuba, while strong economic and trade relationships have fostered such changes elsewhere.

As a full-fledged member of the world trade community, China will be forced to open its doors and allow not only goods, but also ideas, into its closed society. U.S. Trade Representative Charlene Barshefsky noted that Chinese dissidents have endorsed WTO accession as a "first step" in democratic reform.

In reading accounts of the Seattle protests, I discovered an interesting fact about some of the protesters: Many of them work in jobs that are dependent on trade--e.g., Boeing machinists and longshoremen. Didn't they realize that a large chunk of Boeing's business comes from foreign sales? Did they ever consider what would happen if the ships stopped coming into port?

Failure to grant China permanent NTR could have disastrous results: the loss of 200,000 jobs in export-dependent industries. I wonder what the AFL-CIO will say then.