Congress has the opportunity this year to give U.S. workers and businesses a competitive edge by supporting Permanent Normal Trade Relations status for China. That status will enable the United States and California to share in the economic benefits when China joins the rules-based World Trade Organization.
PNTR status is critical to opening opportunities for California companies to conduct trade with China, which is the state’s 11th largest export market. Exports to China support more than 30,000 jobs in the state.
If the United States does not grant PNTR, China and the United States would treat each other as if they were not members of the WTO. China still could become a WTO member and the benefits of the agreement then would go to the United States’ other major trading partners.
PNTR and the U.S.-China Trade Agreement concluded in November 1999 are a win-win for everyone. China already has access to U.S. markets; supporting PNTR will open the door to China’s consumer marketplace,the world’s largest with a population of 1.2 billion.
The WTO is credited with helping to create 1.5 million new jobs worldwide and since 1994 bolstering trade by 37% to an annual $6.5 trillion. It gives businesses improved access to foreign markets and better rules to ensure fair competition with foreign businesses.
WTO rules require members to extend unconditional most-favored nation status,what the United States refers to as normal trade relations status,to each other in order to enjoy the lower tariffs and other benefits of the multilateral trade agreement that created the organization.
President Clinton has submitted legislation to Congress asking for PNTR status for China. Gaining congressional support for PNTR for China is a top priority of the Clinton administration and the business community.
For more than two decades, under Presidents Carter, Reagan, Bush and Clinton, Republicans and Democrats have joined together to ensure the expansion of U.S.-China trade. Because China is not a WTO member, it is ineligible for the low tariffs NTR status grants to most other U.S. trading partners.
The United States withholds PNTR from only a few countries: Cuba, North Korea, Vietnam, Laos and Afghanistan. Previously, on June 3 each year, the President has extended the waiver of Title IV of the Trade Act of 1974 (Jackson-Vanik freedom of emigration requirements) for China for another 12 months, from July 4 through July 3 of the following year.
California has much to gain from the agreement if Congress votes to make permanent the same normal trade status for China that it has renewed annually for nearly 20 years.
The agreement will zero-out tariffs on exporting California-made semiconductors, computers, telecommunications equipment and other information technology products by 2005.
China’s commitments on agriculture will include an end to cotton and rice export subsidies and increase import quotas, as well as lower tariffs on beef, poultry, citrus, almonds, wine, cheese and ice cream.
Liberalization of restrictions on foreign films, videos and sound recordings, as well as cinema ownership and operation, will provide new opportunities for California’s entertainment industry.
The vote in the U.S. House of Representatives has been set for the week of May 22. The Senate floor vote will follow.
Businesses and individuals are encouraged to write your representative in Congress as well as send a courtesy copy to U.S. Senators Dianne Feinstein and Barbara Boxer and the California Chamber of Commerce. Ask them to vote for making permanent the same normal trade status Congress has granted to China for nearly 20 years.
Zaremberg is president of the California Chamber of Commerce.
