- The Washington Times - Wednesday, May 30, 2001

President Bush yesterday extended Chinas trading privileges for another year, allowing the Asian giant to enjoy the same tariff rates accorded virtually all other countries.
Mr. Bush, echoing the Clinton administrations approach toward trade with China, said that commercial engagement with China will help pry open a previously closed society.
"Open trade is a force for freedom in China, a force for stability in Asia and a force for prosperity in the United States," Mr. Bush said. "And this is not just my personal view.
"The institutions and individuals in China who are the least friendly to freedom are often the least friendly to trade; the institutions and individuals most sympathetic to freedom are often the most friendly to trade," Mr. Bush said in a speech to the World Affairs Council of Los Angeles.
Though subject to congressional review, the decision is likely to stand, despite the highly charged dispute in April between the United States and China over a downed American reconnaissance plane. The Chinese took the Navy planes 24 crew members hostage after they made an emergency landing on Hainan island April 1 after a collision with a Chinese fighter.
The Pentagon announced yesterday that the aircraft, which is still on the island off the Chinese coast, will be flown back to the United States on a giant cargo plane. China had insisted that the plane be taken apart and shipped back to the United States in pieces, which would have consigned it to the scrap heap.
Now, the plane likely will be repaired at a facility owned by Lockheed Martin Corp., the manufacturer, and returned to service, a Pentagon official said.
The renewal of Chinas trading status, which has taken place every year since the two nations began trading in 1979, has become an annual ritual, though it has been accompanied by heated rhetoric over human rights, security policy and economic issues since the 1989 Tiananmen Square massacre. Few, if any, observers expect Congress to overrule the president.
This year, the plane incident, Chinas detention of U.S.-based academicians and Beijings bid to host the 2008 Olympics are likely to dominate the debate on its trade status, congressional and industry sources said.
Under a 1973 law known as the Jackson-Vanik amendment, the president must make a decision on China trade each year by June 3. In theory, Congress can overrule him by passing a joint resolution of disapproval on a majority vote.
A House vote on "normal trade relations" — formerly known as most-favored-nation status — is likely in late June or early July, a congressional aide said. If it does not act by July 3, the presidents decision stands.
But in practice, the president can veto the resolution, requiring opponents to scrounge up a hard-to-get two-thirds majority to override his opposition.
Supporters of open trade with China expressed optimism that the House would back Mr. Bushs decision, making a Senate vote unnecessary.
"We have never taken this vote for granted," said Calman Cohen, president of the Emergency Committee for American Trade, a business group. "But we believe there is a wellspring of support [in Congress] for robust trade with China."
If Congress revokes normal-trade-relations status with China, its exports to the United States would be hit with prohibitive duties, and China would likely retaliate, disrupting the $116 billion in trade between the two countries.
The United States had an $81.3 billion trade deficit with China last year.
But the greater danger would appear to lie in the votes potential for diverting the attention of members of Congress from the Bush administrations top trade policy priority — winning the authority to negotiate new trade agreements.
"Frankly, it would be better if we werent having the [China trade] vote, because it is a distraction," Nicholas Calio, Mr. Bushs chief lobbyist, said last week. "Theres no denying that."
The White House is gearing up for votes on "fast-track" trade negotiating authority in committee this summer and in the full House and Senate by the fall.
Only a handful of countries — pariah states such as Cuba and North Korea — do not enjoy normal trading relations with the United States. Congress approved permanent normal trade relations with China last year by a decisive 237-197 vote, but the permanent switch hinges on Chinas entry into the World Trade Organization.
Those negotiations have bogged down in disputes between China and the WTOs 140 existing members over Chinas plans to reduce agricultural subsidies.


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