Friday, March 22, 2019

Normalizing Trade Relations With China Was the Right Thing To Do: New at Reason

By Reason Staff - March 22, 2019 at 09:45AM

|||Tzogia Kappatou/Dreamstime.comCongress granted "permanent normal trade relations" (PNTR) status to China in a 200o vote. Congress passed PNTR to smooth China's entry into the World Trade Organization (WTO), but the country probably would have joined the WTO either way. And Congress would likely have continued renewing normal trade relations with China each year, as it had since 1980, granting it the same access to the U.S. market as almost all our other trading partners. The key difference would have been that the United States would not have benefited from the Protocol of Accession that China had signed, in which it made significant commitments to reduce tariffs and to further open its economy to imports and investment. Other WTO members would have gained that additional market access, while U.S. producers would have faced higher, discriminatory barriers.

Critics like U.S. Trade Representative Robert Lighthizer have long claimed that Congress made a major mistake when it granted China PNTR status. Just last month, Lighthizer testified before the House Ways and Means Committee. But Lighthizer exaggerated the costs of PNTR, minimized its benefits, and claimed it failed to deliver on expectations it in fact was never intended to fulfill.

Rejecting PNTR would also have meant that the U.S. could not use the WTO dispute settlement mechanism to challenge Chinese trade practices. By approving PNTR, Congress opened the door for U.S. producers to dramatically expand the value of American-branded goods and services sold in China. As a result, U.S. exports of goods and services to China have grown exponentially.

Far from being a mistake, the vote in 2000 on China PNTR was one of the finer moments of bipartisan postwar trade policy, writes Daniel Griswold in his latest at Reason.

View this article.

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