Bush Grants China Normal Trade Status

President Bush formally granted China permanent normal trade status Thursday, ending a quarter-century policy of using access to U.S. markets as an annual enticement to the communist giant to expand political and economic freedoms.

The president’s decision brings to an end yearly battles in Congress since 1980 that at times divided the Democratic Party during the Clinton years. It was set up by China’s admission last month to the World Trade Organization.

Bush said the trade proclamation would open up the vast Chinese markets to billions of dollars in American goods.

“This is the final step in normalizing U.S.-China trade relations and welcoming China into a global, rules-based trading system,” he said.

The new trade status takes effect Jan. 1, Bush said in the announcement released in Crawford, where he is vacationing.

Technically, Bush’s proclamation formally removed China from having to adhere to the 1974 Jackson-Vanik Amendment to the Trade Act of 1974.

The amendment, initially aimed at the former Soviet Union’s restrictions against Jewish emigration, withholds normal trade relations with communist states that restrict emigration.

Since 1980, China has enjoyed temporary normal trade relations with the United States under annual presidential waivers of the law. But each waiver has triggered debates in Congress over China’s record on human rights and weapons-proliferation abuses.

The last one occurred in July, when the House voted 259 to 169 to approve Bush’s waiver this year, the last that will be necessary.

The annual congressional battle pitted American business and its Republican allies against big labor and its Democratic supporters. Former President Clinton, at odds with many in his own party, started the process of moving China toward permanent trade status before he left office.

Congress last year granted the permanent status to China contingent upon its entry into the WTO. Its application was accepted formally at the WTO’s annual meeting last month in the United Arab Emirates.

The annual struggle also inflamed tensions with China and prompted worries in that country every time it arose.

China and the United States reached an agreement, as part of China’s WTO entry, that will lower China’s tariffs on U.S. goods and open up its service sector to American companies.

China’s tariffs on U.S.-made goods are to decrease from an overall average of 25% to 9% by 2005. Duties on America’s primary farm products are to drop from 31% to 14%.

China has an $80-billion trade surplus with the United States.