- The Washington Times - Friday, May 19, 2000

Next week, the U.S. House of Representatives will vote on President Clinton's proposal to make permanent Normal Trade Relations (NTR) with China. The issue, however, is less about what China gains from upgraded trade status than what U.S. businesses and workers gain.

In November the Clinton administration concluded a historic market-opening NTR agreement with China as a condition for China's entry into the World Trade Organization (WTO). For years, China had negotiated the terms of its entry into the WTO a membership that would require it to drop protectionist trade barriers under the supposition that permanent NTR with the United States would be part of the deal. That status would mean that China did not have to undergo an annually embarrassing review of its human rights violations to get yearly extensions of NTR status.

But more recently China has declared it will join the WTO regardless of whether Congress approves permanent NTR. If the House rejects it, lawmakers risk shutting U.S. firms and workers out of Chinese markets to which the rest of the world will enjoy an open door.

The administration rightly regards the vote as the most important of the year. In a Wednesday speech at the U.S. Coast Guard Academy, Mr. Clinton went so far as to assert that congressional rejection of permanent NTR legislation would "invite a future of dangerous confrontation and constant insecurity." On the same day, presumptive Republican presidential nominee George W. Bush, citing "three compelling reasons to support [the WTO] agreement freedom, security and economics," echoed the administration's emphasis, saying the vote would be among the "most serious decisions our government will make this year."

Also on Wednesday, the House Ways and Means Committee voted overwhelmingly, 34 to 4, in favor of granting China permanent NTR. Despite such bipartisan committee approval, however, the outcome of next week's vote in the full House is still uncertain. Indeed, administration officials believe they are still 10 votes shy from prevailing in the House as Democratic supporters are having difficulty obtaining the 70 Democratic votes, or one-third of the party's caucus, believed to be necessary for the measure to pass.

Failure to grant China permanent NTR would be a serious setback for the cause of free trade, a cause the United States has been leading throughout the postwar period. And it would be a terrible development for the world economy, whose growth has depended greatly on the relentless, U.S.-led dismantling of trade barriers. Moreover, the failure would cast serious doubt on the United States' resolve to continue its indispensable leadership in this vital area throughout the new millennium.

As the House prepares to vote, a very important distinction needs to be made. Whether protectionist representatives like it or not, next week's vote will have no bearing on China's eventual accession to the WTO, which is expected to occur later this year. It seems quite clear that China, following the completion of market-opening agreements with the European Union and other major trading countries, would be able to muster the two-thirds vote among the WTO's 136 members it will need to join. Equally clear is another fact. If the U.S. Congress fails to grant China permanent NTR, China would continue to apply to U.S. businesses the currently prevailing high tariff rates and other trade barriers. Meanwhile those barriers would come down for businesses of other nations whose governments have granted China permanent NTR.

Irrespective of how the House votes next week, China's relatively closed market, which comprises one-fifth of the world's population and which has already greatly expanded during the last 20 years, will be significantly opened to foreign businesses and investment over the next few years. What wavering congressmen must simply decide is whether they will vote to permit U.S. businesses and workers to take advantage of these unprecedented opportunities.

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