By DOUGLAS C. MCGILL and ALEXA OLESEN
(Virtual China News, May 23) Relations between two global superpowers, the U.S. and China, will be shaped for years to come in a vote on legislation this Wednesday in the U.S. House of Representatives.
The legislation has a narrow purpose but extremely wide ramifications for China's interwoven struggles to reform its struggling economy, to open itself peacefully to international relations and global commerce, and to maintain social stability within its own borders at a time of incredibly rapid change in virtually every sphere.
For the U.S., tens of billions of dollars of annual trade with China is at stake, as well as the state of relations with a country whose vast potential consumer markets could fuel a new stage of U.S. economic growth. For some, the Wednesday vote will also determine whether China becomes a closer trading partner of the U.S. or a more determined foe whose arms buildup and national belligerence, especially over the issue of Taiwan independence, threatens U.S. national security.
HR-4444
The law, HR-4444, would grant permanent normal trading status, better known as PNTR, to China. This would eliminate the annual Congressional review during which China's record on human rights and foreign policy is publicly scrutinized and criticized before a vote is taken whether to extend normal trading (formerly known as "most favored nation") status for another year.
Since 1980 the vote has always gone China's way, but the ritual is an annual humiliation for China which has set the tone for U.S.-China relations and severely affected the ability of U.S. companies to gain market access and to secure manufacturing and sales contracts inside the PRC.
This year, PNTR has become an historic vote because of a successful deal struck last November between the U.S. and China, in which the U.S. agreed to support China's joining the World Trade Organization (WTO) in return for wide-ranging trade and market opening concessions for many U.S. industries. The bill could also significantly reduce the US$60 billion trade deficit the U.S. currently has with China.
Trade-stimulating measures
If Congress votes "yes" on PNTR this Wednesday, all the U.S. companies and industries covered in that deal will reap benefits in the form of lower tariffs, the expansion and even abolition of export quotas, guarantees of greater equity investment in joint venture enterprises, and a variety of other trade-stimulating measures.
If Congress votes "no," those benefits will be foregone by U.S. companies and enjoyed, instead, by China's other global trading partners including the countries of the European Union and others with whom China has successfully concluded WTO pacts.
China has not yet officially joined the WTO, but with the U.S., the EU, Japan, and most other developed countries already having concluded successful talks with China, it is widely believed that accession will occur as early as later this year.
Strident Anti-China
The imminent vote on PNTR for China has in recent weeks inspired one of the most dramatic and far-reaching legislative and lobbying campaigns ever seen -- and one featuring many unusual coalitions of normally opposing camps.
On the one side, favoring PNTR, is U.S. President Bill Clinton, a minority of House Democrats, and a majority of House Republicans including Clinton's arch-enemy on many issues over the past year, the Texas Republican house whip Tom Delay.
On the other side, against PNTR, are a majority of Democrats, most of them following the strident anti-China stance of the AFL-CIO, and a minority of religiously-minded Republicans opposed to China's persecution of religious groups, practice of forced abortion, and other similar human rights issues.
Of additional concern to far right republicans are China's military ambitions. The findings of the 1998 Cox Report that raised concerns about China's stealing military secrets from the United States and their involvement in arms dealing. Those activities are still major issues today in the Sino-US relationship. Opponents of PNTR believe that granting China trade benefits will enable China to buy more weapons and will result not in a democratized PRC, but in a nationalistic and belligerent super power.
Republican Senator Jesse Helms and Democratic Representative Nancy Pelosi have found common ground with this type of cold war mentality and have been making their voices heard by holding press conferences and writing editorials.
Other Senators, such as Democratic Whip David Bonior and Democratic Representative Sherrod Brown, have opposed the bill because of the threat it will pose to the jobs of American blue collar workers.
The Family Research Council, a conservative non-profit educational organization based in Washington, was airing ads last week warning of the possible ramifications if PNTR is passed and on Monday had a representative speaking before the House.
The ads show the face of Li Dexian, a Chinese Pastor, who was arrested by Communist government officials fourteen times for his outspoken religious beliefs. The FRC said in a press release last week that the radio and newspaper ads would receive play "in the districts of conservative representatives -- many of them from the South -- who are undecided on PNTR for China yet have pro-life and pro-religious freedom voting records."
At least an equal number of organizations have come out in favor of PNTR.
The American Jewish Committee issued a statement on May 17 saying that "the granting of permanent normal trade relations, combined with China's accession to the World Trade Organization, will strengthen the political and business forces of openness with China--the forces that have been and are expected to be advocates for human rights progress and closer political ties to the West."
Federal Reserve Chairman Alan Greenspan left no doubt as to his position on PNTR when on Thursday he read aloud the substance of a statement he had written on May 5th. Greenspan spoke at a press conference in the Rose Garden and was introduced by President Clinton.
"As China's citizens experience economic gains, so will the American firms that trade in their expanding markets," said Greenspan.
Fence-sitters
Top officials have not been alone in their campaign. Big business has been aggressively lobbying as well, hoping to gain access to the emerging market promise of the worlds most populous nation. Among those eager to reap the benefits are airplane manufacturers Honeywell Aerospace and Boeing, telecommunications giant Motorola, transportation company the United Postal Service and car manufacturer General Motors. Additionally the U.S. Motion Picture Association and trade groups such as the National Association of Manufacturers have also substantially contributed to the lobbying effort.
Until late last week, most Congress watchers had been calling the vote, which needs 218 "yes" votes to pass, too close to call. Last week, however, the President, for whom this is the last piece of major legislation before his term runs out this November, has unleashed an all-out lobbying campaign of telephone calls and Oval Office chats with Congressmen who are still undecided.
That campaign, mixed with side legislation designed to address the concerns of doubters, has helped to win over fence-sitters and tilted most vote-counters towards a prediction of close, but will pass.
Also see: Trade Bill Picks Up Bipartisan Steam
To reach Douglas McGill email: dmcgill@virtualchina.com
