US House panel recommends China receive normal trade status
WASHINGTON (AFX) - The House Ways and Means Committee voted to extend normal trade relations (NTR) to China for an additional year, while China continues the process of formally joining the WTO, officials said.
"In spite of the difficulties that we have had with China, I still believe that America's best strategy for promoting lasting democratic change is through the free exchange of goods and services, in the context of normal trade relations," Trade Subcommittee Chairman Phil Crane, an Illinois Republican, said before the full committee recommended on a voice vote that the full House reject legislation that would prevent China from receiving the preferred trade status.
It is unclear when the full House will vote on the measure, but congressional sources told AFX News they expect it to be rejected in a vote to take place early next week.
Tensions between the two nations in April over a US spyplane collision had caused some to wonder whether there would be spillover into the trade arena, but most analysts expect the full House to continue current policy.
Congress permanently extended NTR to China in May 2000, but the law does not take effect until China formally joins the 141-member WTO.
Under the current law, China must receive an annual waiver from a 1974 law which prevents countries that restrict emigration from receiving NTR status. NTR status guarantees the lowest tariff rate on imports to the US.
In years past, the annual vote has been an opportunity for opponents of the waiver to voice concerns on a host of issues related to US-China relations, including the bilateral trade balance and China's record on environmental policy, worker rights and human rights.
This year, opponents took on a more fatalistic attitude at a Tuesday hearing, given the passage of permanent NTR status for China once it joins the WTO.
Meanwhile, China is the near the end of the road in its 15-year bid to join the Geneva-based trade body and negotiators are set to meet again the week of July 16 at a so-called "working party" session to work out remaining differences on China's accession.
A US trade official said earlier this week that China could join the WTO by year-end.
The official said he hopes the meeting would be the penultimate negotiating session before the terms of China's accession are formally approved by WTO trade ministers in November in Doha, Qatar, where the ministers hope to launch a new round of global trade talks.
China would then have to ratify the terms of its accession before formally joining the WTO, and analysts have said that could be delayed until sometime early next year, even if the accord is approved in Doha.
In a separate vote, the committee also recommended that Vietnam be exempt from that same 1974 law in order for US companies to be eligible to receive US government export financing to Vietnam. The US has not yet ratified a 2000 bilateral trade agreement, so Vietnam is not yet eligible for normal trade relations.
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