Trade and the Transformation of China: The Case for Normal Trade Relations

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Congress will soon consider whether to revoke normal traderelations (NTR) with China and then, possibly in the fall, whetherto make NTR permanent as part of China's anticipated entry into theWorld Trade Organization. The consequences of congressional actionare huge.

China today is America's no. 4 trading partner. In 1998Americans imported $71 billion worth of goods from China andexported $14 billion, making China the 13th largest market abroadfor U.S. goods. Trade and economic reform have helped to lift 200million Chinese out of poverty since 1978. Revoking China's NTRstatus would raise average tariff rates on Chinese goods enteringthe United States from 4 percent to more than 40 percent, putting achill on U.S.-Chinese commercial relations.

Trade encourages human rights and facilitates the work ofWestern religious ministries active in China. East GatesInternational, headed by Ned Graham, son of evangelist BillyGraham, has been able to distribute 2.5 million Bibles legally inChina since 1992. According to Graham, the organization cancommunicate freely with its contacts in China because of theproliferation of information-exchange technology such as e-mail,faxes, and cellular telephones -- a development made possible bytrade and economic reform.

Making China's NTR status permanent before its entry into theWTO would allow American companies to reap the benefits of the"breathtaking" offer made by Chinese premier Zhu Rongji in April toopen up China's economy to international competition.

Finally, China's entry into the WTO would encourage furthereconomic reform in China and restore its faltering economic growth.To facilitate that entry, the United States should drop itsunreasonable demands that China agree to an extension of U.S.quotas on textile imports and stricter antidumping and "safeguard"rules that discriminate against Chinese exports.