China's WTO Updates
Trade Tops Sino-US Trouble

Chinese officials, academics and US businesses in China have welcomed the Bush government's announcement of support for China's normal trade relations (NTR) status.

US President George W Bush formally asked Congress last Friday to renew NTR with China, saying it would help foster "a strong and productive relationship."

Although Bush's endorsement was widely expected, it will warm the atmosphere for top-level Sino-US talks in Shanghai this week that will focus on China's stalled WTO bid, analysts said.

Ties between China and the United States have been strained by a range of issues since Bush took office, including the collision between a US spy plane and a Chinese fighter in April and US arms sales to Taiwan.

Despite the tensions, the new government is expected to take an even more active stance in expanding trade and economic cooperation with China than the Clinton administration, its predecessor, said analysts.

"The Bush government would give more encouragement for US businesses to expand their investments in and exports to China in order to have a share of the huge market," said Zhou Shijian, vice-chairman of the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters and a veteran expert on Sino-US trade relations.

The Republicans are traditional supporters of expanding trade with China, he said.

Last year, 73.87 percent of 211 Republican votes in the House of Representatives supported permanent normal trade relations (PNTR) with China, making up 69 percent of the total positive votes.

Zhou told Business Weekly that Bush's support for China's NTR status is widely expected because it is as important for the United States as for China.

He said US consumers would have to pay at least an extra US$40 billion if NTR is denied to China and the US turns to imports from other countries.

In a statement asking for congressional support, Bush made it clear he wanted free trade with China, despite strained relations.

"Fair trade is essential not only to improving the living standards of Americans, but also for a strong and productive relationship with China," Bush said.

"Recent events have shown not only that we need to speak frankly and directly about our differences, but that we also need to maintain dialogue and co-operate with one another on those areas where we have common interests."

Bush signaled his decision to renew normal trade relations earlier last week in a speech that was well received by Chinese officials.

"We express our welcome," Foreign Ministry spokesman Zhu Bangzao said in response. "This is a two-way reciprocal trade arrangement between two nations and absolutely not a favor granted by one country to another."

US businesses in China also hailed the president's support for the renewal of China's NTR status as a sign that frosty bilateral relations could be on the mend.

"The Bush administration has made a decision that is in the broad interests of the country," said Patrick Cranley, director of AsiaMedia and a former head of Shanghai's American Chamber of Commerce.

Bush has now drawn a line in the sand between strained political relations and the administration's desire to build stronger economic ties between the United States and China, said US business executives.

His support for the renewal of China's trade status comes just days before US Trade Representative Robert Zoellick is expected to arrive in the eastern Chinese city of Shanghai for trade talks with Chinese officials at the Asia Pacific Economic Cooperation meeting for trade-related ministers in Shanghai this week.

US businessmen in China said Bush's support for normal trade with China will ease tensions and allow forthcoming trade talks to get off on the right foot.

"The president made a very sensible decision to renew normal trade relations with China and businesses are looking forward to not only renewal of NTR but also China's accession to the WTO in the beginning of 2002," said Pat Powers, director of China operations at the US-China Business Council.

Businessmen said the Bush administration's support for NTR was expected, but they were still bracing themselves for another round of bruising anti-China rhetoric on Capitol Hill when the debate reopens next week.

"The debate will be slightly more acrimonious than in past years, but I am confident the administration will be able to prevail," said A B Culvahouse, chairman of global law firm O'Melveny and Myers, which has a large practice in Shanghai.

Last year, Congress approved PNTR for China to dispense with the annual review of the trade status which has traditionally been accompanied by damaging debates on human rights and Chinese labor practices.

However, PNTR was conditional on China joining the WTO and as Beijing's bid to enter the global trade body has stalled, the issue is once again on the congressional agenda.

(China Daily June 5, 2001)

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