U.S.-China Trade Pact Has Potential to Harm Us
Sometime this year, Congress will vote on whether to extend permanent most-favored-nation status to China. It is a vote tied to China’s entry into the World Trade Organization and the only vote Congress has on this momentous agreement.
On one hand, China is a potential boom market for our industries, particularly agriculture. Bringing China into the WTO has the potential to make the Port of Hueneme an even more important portal for Pacific Rim trade. With 20% of the world’s population, China is an appealing market. It behooves us to work diligently and intelligently to open it to U.S. sellers.
The other hand carries many pitfalls. China’s track record in meeting its obligations under international agreements is not good. China is the only remaining Communist superpower. It has stolen our nuclear secrets and threatens stability in Asia with its belligerence toward Taiwan and others. We ignore that reality at our own peril.
In July, I voted against a one-year extension of China’s most-favored-nation status based on two criteria:
* The United States maintains a multibillion-dollar trade deficit with China and has for years.
* China has repeatedly demonstrated an aggressive military stance that includes stealing our most important nuclear secrets.
I am not automatically against China’s entry into the World Trade Organization but I do have serious concerns.
WTO membership carries more protection for the United States than does most-favored-nation status. Most favored nation is a one-way street. It’s a unilateral decision on our part to allow China access to our markets with no reciprocal opening on China’s behalf. WTO is, at least theoretically, a two-way street. China must meet and maintain certain open-door criteria to remain in the WTO.
Our trade with China historically has been a one-way street. In 1990, our trade deficit with China was $10.4 billion. By 1998, it had climbed to $56.9 billion. In 1999, it is estimated to have been $66.4 billion. China’s entry into WTO could ease that deficit but only if the agreement has teeth.
In 1992, China and the U.S. signed a bilateral memorandum of understanding on trade access. China has violated it more than six times.
In 1992, we also struck a deal with China to protect intellectual property, including copyrights on U.S. products. Today, more than 90% of U.S. copyrights for motion pictures and software in China continue to be stolen by Chinese companies, resulting in the loss of billions of dollars and many thousands of American jobs. Chinese noncompliance has forced us to threaten trade sanctions several times.
On the national security front, China was continuing a systematic raid on the designs of our most sophisticated thermonuclear weapons at the same time it was modernizing and pretending to normalize relations with the U.S. Among the stolen designs was information on the neutron bomb, which to date no nation has opted to deploy and, one hopes, none will. Even though China has been caught red-handed, it continues to deny its espionage. Meanwhile, it showcases its belligerence by transferring sensitive missile technology to North Korea and by repeatedly threatening to attack Taiwan.
The U.S.-China agreement can have positive consequences for the U.S., China and, indeed, the entire world. If written well, the agreement would force China to open its markets to U.S. goods and services, which would lower the trade deficit. It could wean China from its passion for subsidies and government interference in its industries. It could educate the Chinese on the rule of law, as opposed to its current system of rule by the whim of its leaders. It could also hasten the spread of democracy within China’s borders. Each time a country has opened its economic markets, an open market of ideas has followed.
But we must step carefully. We must not let our desire to access China’s markets blind us to China’s distaste for democracy, its threat to our national security and its history of violating international laws and agreements. For the WTO agreement to work, it must level the playing field for U.S. exporters and be fully enforceable. Anything less will not open China’s markets or advance the historical trend toward truly free trade and the rule of law.
U.S. Rep. Elton Gallegly (R-Simi Valley) represents most of Ventura County.
