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China Trade Deal May Be Abandoned

  • The downing of an American plane and capture of its Navy crew may result in the special trade deal with China coming unraveled.
Exclusive to The SPOTLIGHT
By James P. Tucker Jr.

The Bush administration promised "free trade" and admission into the World Trade Organization if China returned the captive Navy crew -- but the incident may have reverse results.

Public outrage at China for so badly damaging the Navy plane in international air space that it had to land on Chinese soil is high (see Spotlight on Congress, page 8 and related story on page 6).

This could result in Congress abandoning permanent "normal" trade relations (PNTR) with China and blocking the communist state's entrance into the WTO.

Already, bipartisan legislation to repeal the trade deal has been announced. It has a "good chance" of passage, the authors said.

President Bush has until June 3 to notify Congress if he intends to grant China "normal trade relations" for another year. Congress passed legislation last year giving China this status permanently, but it only takes effect after China enters the WTO. If Congress rescinds PNTR, China becomes ineligible for WTO membership.

Lobbyists for international corporations tactically held their fire while China was holding the American Navy crew. But before their feet walked on American soil, the megacorporations were pressing their case for "free trade" with China.

The Business Roundtable, a pressure group composed of some of the largest U.S. businesses including Boeing, had spent millions lobbying Congress for passage of PNTR. Big business was not about to give up its prize.

Big business wants to increase its profits by accessing China's cheap labor market and escaping U.S. labor benefits. The result has been a significant loss in U.S. manufacturing jobs and a decline in the quality of many products sold in America.

But having heard from outraged voters, many congressmen resisted the pressure of power and money. Typical was the reaction of Rep. Bernie Sanders of Vermont (I), a left-wing populist in Congress.

In announcing bipartisan legislation to revoke PNTR, Sanders said "it is inconceivable that the United States would retain most favored nation trading status" with China after the airplane incident.

"The United States has an $83 billion trade deficit with China, which is costing us hundreds of thousands of decent-paying jobs," Sanders said.

"Corporate America, which has invested tens of billions of dollars in China, put great pressure on Congress last year to pass permanent normal trade relations with them," Sanders said.

"My impression is that, as a result of this incident, many members of Congress are rethinking their votes and that we have a good chance of repealing that legislation," Sanders said.

Copyright 2001. All rights reserved.