Foright Policy Granting Normal Trade Status To

Foright Policy: Granting Normal Trade Status To China Essay, Research Paper

Granting Normal Trade Status To China

Chris Palmer

Foreign Policy

Dr. Wells

April 4, 2000

Whether to grant China with normal trade status as it enters the WTO (World Trade Organization) thus eliminating congressional review status under the Jackson-Vanik amendments to the 1974 trade statute, is an important issue when considering the validity and repercussions that granting normal trade status would do to US-Chinese relations.

It took three United States Presidents, two Chinese leaders and dozens of negotiators 13 years to clear a path for China to get the chance to join the World Trade Organization, which could occur if legislation sponsored by President Clinton is passed by a skeptic legislative branch, that has relied on the annual review of trade status as a means to police the Chinese government”( Kahn 1). “House Speaker Dennis Hasert, indicated that the GOP will stop playing political games by announcing that he will schedule a floor vote on legislation to grant China permanent normal trade status the week of May 22″(Newman 66).

Before exploring the issue at hand, it is important to discuss and define several different parts of the essay. First normal trade status is a term used to describe the trade status of the United States and its trading partners. Normal trade status means that the United States is on favorable terms with the country that it is trading with. The significance of granting normal trade status is that tariffs and trade agreements are easier to implement and are more favorable to a country with normal trade status opposed to a country that has not been granted normal trade status.

“The WTO, can be defined as the World Trade Organization, which is a 135 member trade organization based in Geneva. To gain membership into the organization one must first reach bilateral trade deals with each major trading partner. Second, it must

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agree to a membership protocol- or ground rules- created by a working party. This working group sets up provisions for the key trade categories in each bilateral deal. Also this group sets up a timetable that a country wishing to gain membership into the WTO

has to implement the provisions. Last the 135 member countries of the WTO, vote on the prospective countries membership to the WTO and if the members vote “yes” by a two-thirds majority then a country gains admittance” (Nitschke 609).

The Jackson-Vanik amendment that allows for the annual renewal of normal trade status to China, was a “limit that was set under a provision in the 1974 Trade Act written by Sen. Henry M. Jackson D-Wash., and Rep. Charles A. Vanik, D-Ohio, that requires the president to certify every year that certain communist nations are allowing unfettered emigration before giving them regular trade standing” (Nitschke 608).

There are three different foreign policies that can be considered and adopted. The three different policy positions are to grant normal trade status to China as it enters the world Trade Organization without concessions or special conditions that have to be met, to uphold the Jackson-Vanik Amendments, thus having the president review the possible annually of granting normal trade status to China, or to grant normal trade status to China based on reaching concessions. The different concessions would range from opening all markets to the United States and its corporations within a year to providing evidence that workers will not be used adversely in the production of Chinese goods and products.

The first policy option that will be analyzed and discussed is one, which would instill normal trade relations with China without allowing for concessions. “The economic case for granting permanent normal trade relations to China, is unassailable.

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Under the able and indefatigable leadership of the United States’ Trade Representative Charlene Barshefsky, the deal the Clinton Administration struck with China to gain our support for its admission to the WTO is manifestly in the United States’ economic interest. Since the deal does not require that the United States open its markets any further, it is unlikely to have much effect on the United States’ imports from China Moreover, the deal contains special protections against surges of imports”(Tyson 34). Considering this information the policy option that is economically the best is one that would allow the instillation of permanent normal trade relations with China. “Failing to give permanent normal trade relations to China amounts to a unilateral giveaway to America’s competitors. Congress cannot decide whether to admit China to the World Trade Organization. It can only decide whether the United States will receive the same benefits as our competitors. If Congress denies permanent normal trade relation status to China, it also denies the United States the benefits of the concessions made by China to win World Trade Organization membership”(Tyson 34). These benefits would then benefit Europe and Japan and would allow these countries to have lower import tariffs to China, and therefore allowing for cheaper products than those made in the United States. This would essentially lower the number of US products bought and increase the amount of European and Japanese products boug

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