Clinton Signs China Trade Bill
October 19, 2000
Chinese American-owned businesses are to benefit
By Associated Press & Ian Kim
President Bill Clinton has signed the China trade bill, a hard-fought victory for the White House that promises to ultimately open markets in the communist country to billions of dollars in U.S. goods and services.
Even as he signed the bill, the president was dispatching U.S. Trade Representative Charlene Barshefsky to Beijing Oct. 10 to nudge the Chinese to complete its agreements to join the World Trade Organization. Talks are stalled as China backpedals on details of its trade accords with the United States and other nations.
President Clinton signs the U.S.-China Relations Act of 2000 on Oct. 10. Photo courtesy of the White House.
“Our work is not over when I sign the bill. China still must complete its WTO accession agreements,” Clinton said. “But when it happens, China will open its markets to American products from wheat to cars to consulting services, and our companies will be far more able to sell goods without moving facilities or investments there.”
Clinton was joined at the ceremony on the South Lawn by several members of the cabinet and about 50 Republican and Democratic lawmakers. The measure passed the House 237-197 on May 24 after much arm-twisting by the White House. It easily passed the Senate, 83-15, on Sept. 19.
Not all Republicans disagreed with the president. Not all Democrats agreed.
“In case you’ve all forgotten, this thing was hard to pass,” Clinton joked. “This was a lot of trouble.”
The measure establishes “Permanent Normal Trade Relations” (PNTR) with China. This means the United States will lower its tariffs on imports from China, and has scrapped its system in which Congress annually reviewed China’s trade privileges. In response, China is expected to lower its trade barriers, benefiting U.S. exporters.
In China, the government’s Xinhua News Agency said in a brief report that the signing of the trade bill serves the “fundamental interests of the people of the two sides.”
Ending the annual review of China’s trade privileges “benefits the advancement of China-U.S. trade cooperation and the continued forward development of relations between China and the United States,” Xinhua said.
U.S. labor unions, conservative groups and human rights campaigners had argued that the annual review gave the United States a chance each year to pressure China on human rights, trade practices and weapons exports.
Clinton maintained that opening markets to U.S. goods and services and strengthening U.S.-China relations would ease the way toward economic freedom for China’s more than 1 billion people.
“Nothing, nothing can enhance the prospects of peace and the prospects of a very different 21st century like having China take the right path into the future,” Clinton said.
ASIAN AMERICAN REACTION
For Asian American-owned businesses, particularly those owned by Chinese Americans, the move is especially advantageous, allowing them to fully participate in a global Chinese business network. “The Chinese Diaspora—the hua qiao—in other Asian countries like Malaysia and Singapore are doing tons of trade with China,” said Judith Lee, a partner at Gibson, Dunn and Crutcher, a law firm specializing in international trade law. “Now with the opening of Chinese trade in the U.S., the hua qiao here can begin to do the same. The overseas Chinese all over the world are very adept at doing business with China.”
“You’ve got to believe that there is a strong advantage that Chinese Americans hold, especially those in the first generation,” said Mark Hsu CEO of Silicon Valley-based Sina.com, a portal site for the global Chinese population.
“You have a lot of U.S. businesses that have a lot of money that are going to invest in China. At the end of the day, though, if you really talk to a lot of the [business owners in China], I think … they still feel more comfortable in dealing with people of Chinese descent.”
John Chen, CEO of database software giant Sybase, said the trade agreement can also foster better U.S.-China cultural relations. Chen is a board member of the Committee of 100, a group of Chinese American business leaders.
“We [at the Committee of 100] fully believe that as you trade more, you communicate more, and as you communicate more, you become better friends … Then we develop normal relationships, and I don’t just mean in terms of trade. Between China and the United States, we want those two governments to be communicating at various different levels, and with the expansion of trade, that’s an expansion of understanding,” he said.
“It’s good for Asian Americans, it’s also good for Americans in general.”
HUMAN RIGHTS CONCERN
The bill still drew controversy as Clinton signed it last week. Rep. Peter DeFazio, a Democrat, said the signing ceremony should have been a wake to mourn the loss of U.S. jobs and complete capitulation of U.S. interests to communist dictators in Beijing.
“Let’s not kid ourselves. PNTR with China was never about expanding U.S. exports to the Chinese,” he said on the House floor last week. “It was about access by large multinational corporations to a low-wage, brutalized labor force of 1.3 billion people in a country with lax environmental standards.”
However, some view that the trade agreement may put pressure on the Chinese government to improve its human rights condition. “Trade promotes openness, the flow of new ideas, and increases costs to the Chinese government if they resort to oppression,” said Yasheng Huang, professor of international business at Harvard Business School.
ËLabor standards would be improved, as well as requirements of companies to disclose their operations, and the insistence on the part of Western companies on the rule of [international] law,” he said.
After its expected entry into the WTO, China’s tariffs on U.S.-made goods will drop from an overall average of 25 percent to 9 percent by 2005.
Negotiations at the WTO’s Geneva headquarters stalled recently after three weeks of discussions in which the Chinese negotiators appeared to be backtracking on agreements.
Increased competition inside China is expected to result in massive layoffs, especially in state-run companies. Trade analysts believe the reason that China is balking at adhering to some of its agreements is that opposed hard-liners in the Chinese government are arguing that the trade concessions are too costly.
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