The Promise of China Trade
By Colin L. Powell(This column by U.S. Secretary of State Colin L. Powell first appeared in The Washington Post June l, 2001 and is in the public domain. No republication restrictions.)
Today President Bush will submit to Congress a determination extending normal trade relations status to China for another year. I believe this is good for America and good for the forces of change and reform in China. Moreover, it is good for the entire region, especially our friends in Hong Kong and Taiwan, who have the most to gain or lose as China seeks to define a new role for itself in a global civil society.
The president's action is necessary despite passage of legislation last October to give permanent normal trade relations status to China, because China must accede to the World Trade Organization before permanent status takes effect. That accession has not yet happened, though negotiators from many countries are hard at work on it right now.
The president's decision is not an endorsement of China's policies, some of which clearly conflict with America's views and values. Rather, we believe that extension of normal trade relations with China again this year is clearly in America's interest.
Continuation provides America an opportunity to promote rule of law, transparency and accountability in China -- essential elements of our policy designed to promote China's integration into the world trade system and thus promote change in China. As the president said at the Los Angeles World Affairs Council on May 29, "Free trade supports and sustains freedom in all its forms. . . . When we open trade, we open minds." Trade with China is not only good economic policy; it is good human rights policy and good national security policy.
Meanwhile, Congress should keep in mind that U.S. exports to China last year grew 24 percent from 1999 -- to $16 billion -- and provided jobs or other direct benefits to 350,000 to 400,000 U.S. workers. American consumers benefit as well; reasonably priced household goods and clothes from China have helped hold down U.S. inflation in the past few years, and they improve the quality of life for Americans.
This trade also benefits the Chinese people and promotes American values. American firms trading with or operating in China bring American management, American standards of worker safety and worker health, and American concerns about the environment to their business dealings with China. Chinese businesses and workers have a clear preference for dealing with U.S. companies, a preference that translates into adopting American habits in business operations. As China's economy opens, Chinese consumers are making more demands not only for international brands on the shelves but also for international standards in their quality of life.
Not only American business, agriculture, workers and consumers would suffer if Congress were to disapprove normal trade relations this year. Taiwan and Hong Kong -- two important U.S. trading partners and friends with substantial interest in a stable, prosperous mainland China -- would also suffer. Hong Kong economists estimate that China's loss of normal trade relations would cut Hong Kong's economic growth rate by more than half and eliminate 72,000 to 102,000 jobs, dealing a severe blow to its autonomy and self-confidence. Taiwan, our seventh-largest trading partner, has huge investment exposure in the People's Republic of China and benefits greatly from U.S.-China trade. Taiwan could lose $15 billion in overall exports and as many as 50,000 jobs, should China lose normal trade relations with the United States. Most important, we would be undermining the basis for economic relations between the People's Republic of China and Taiwan, a key factor in building mutual trust and confidence between the two. That is one reason Taiwan's President Chen Shui-bian has expressed support for our extension of normal trade relations status to China this year.
We do not expect trade relations to define fully the U.S.-China relationship. We will continue to expect China to live up to its international obligations, whether to advance religious freedom or promote stricter export controls on dual-use items related to missiles or weapons of mass destruction. But trade and exposure to the rules-based international marketplace are changing China for the better. And China's increasing engagement with the outside world makes it easier to work with that country on maintaining peace and stability in the Asia-Pacific region and combating alien smuggling, HIV/AIDS, narcotics trafficking, financial crimes, terrorism and environmental degradation.
Continuation of normal trade relations this year -- and, we would hope, WTO accession soon after -- will confirm for China the need to adapt to the rest of the world, especially in terms of reforming state-owned enterprises and the banking system, increasing the role of private enterprise and creating a safety net that ensures the welfare of the Chinese people. Moreover, it will provide a foundation for China to work with regional players on important trade liberalization objectives at this October's Asia-Pacific Economic Cooperation Leaders' Meeting in Shanghai.
We are mindful of the challenges we have in working with China. Sometimes it's not easy. But if we believe that free markets promote freer societies, if we want China to live up to international standards, if we want to take every step possible to promote American interests in Asia, then it is fundamentally in our national interest to extend normal trade relations.
(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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