Businessweek Archives

The Most Important Vote Congress Will Cast This Year


Economic Viewpoint

The Most Important Vote Congress Will Cast This Year

By this time, anyone who has heard me speak or has read my work knows that I unequivocally support China's admission to the World Trade Organization. Nonetheless, I want to reaffirm my support and explain the reasons behind it. The upcoming vote on whether to grant China Permanent Normal Trade Relations (PNTR) status is the single most important vote to be cast by Congress this year. Indeed, it may well be one of the most significant congressional votes of the first half of the 21st century.

The economic case for granting PNTR to China is unassailable. Under the able and indefatigable leadership of U.S. 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 U.S.'s economic interest. Since this deal does not require that the U.S. open its markets any further, it is unlikely to have much effect on U.S. imports from China. Moreover, the deal contains special protections against surges of imports.U.S. EXPORT BOOST. At the same time, China has agreed to major market-opening concessions that will dramatically expand U.S. exports. Once China is admitted to the WTO, these concessions, like all of China's trading obligations, will be enforced by WTO dispute-settlement procedures that were crafted by U.S. negotiators.

Failing to give PNTR to China amounts to a unilateral giveaway to America's competitors. Congress cannot decide whether to admit China to the WTO. It can only decide whether the U.S. will receive the same benefits as our competitors. If two-thirds of WTO nations agree, as seems likely, China will be admitted to the WTO regardless of how Congress votes. But if Congress denies PNTR status to China, it also denies the U.S. the benefits of the concessions made by China to win WTO membership. These concessions will automatically apply to Europe, Japan, and all of China's new WTO partners.

The national-security case for granting PNTR to China is perhaps even more compelling than the commercial one. The critical challenge for U.S. foreign policy is to manage the adversarial aspects of our relationship with China while simultaneously encouraging China's evolution to a more open, democratic, and market-oriented system. China's membership in the WTO will help us meet this challenge; voting against PNTR will only aggravate it.

Strengthening commercial relations with China will expand the flow of information, ideas, and business practices to China's emerging middle class and hasten the pace of economic and political reform. That's why the reformers among China's leaders have agreed to a bold WTO deal that locks in market reforms despite the substantial adjustment costs. That's why many Chinese workers have written moving letters to the Business Coalition for U.S.-China Trade urging continued commercial opening between China and the U.S.--opening that will measurably improve their lives. And that's why some members of China's defense Establishment who prefer isolation and confrontation over interdependence and cooperation are among the deal's most vociferous opponents.

Those who are tempted to vote "no" on PNTR should be sobered by the realization that their vote will be interpreted in China as a signal that we share this preference. A "no" vote will strengthen the hand of the hard-liners who are undermining our ability to work with China on such areas of mutual interest as stability on the Korean peninsula and nuclear proliferation. Therefore, it should come as no surprise that Taiwan's President-elect, Chen Shui-bian, strongly supports China's WTO membership and the granting of PNTR to China. Once again, would-be opponents of PNTR should take note: If the U.S. is seen as trying to shut China off from the world community, the Taiwanese are justifiably anxious that tensions will only intensify.

During the past eight years, the foreign policy of the Clinton Administration has often been criticized for lacking a strategic vision and for being driven by public-opinion polls. The Administration's policy toward China flies in the face of such criticism. The President has crafted a strategy of constructive engagement with China that has fostered stability in Asia and bolstered reform in China. Now, in the last months of his Presidency, Clinton is committed to winning passage of PNTR and welcoming China into the WTO. With the strong support of business and the cooperation of GOP congressional leadership, a "yes" vote on PNTR and China's accession to the WTO seem all but certain. This will prove to be a big win for America's economic and security interests over the long run.By Laura D'andrea Tyson


We Almost Lost the Nasdaq
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus