WASHINGTON — The U.S. Senate last week approved an amendment-free bill granting permanent normal trade relations for China. The 83-15 vote virtually guarantees U.S. support for China’s bid to enter the World Trade Organization and China’s loosening up its trade barriers to U.S. agricultural products.
Had the Senate amended the bill, as had been feared for weeks, it would have had to go back to the House where a far more contentious atmosphere awaited it.
The House could have rejected the amended version, unlike a controversial earlier vote to approve it, and that would have spelled the demise of the entire PNTR effort.
With the new climate of open markets into China, U.S. agricultural trade is expected to increase by as much as $2 billion annually by 2005, according to the U.S. House Ag Committee.
Currently, exports account for 30 percent of U.S. farm cash receipts and nearly 40 percent of all agricultural production is exported.
Under this agreement, China agreed to recognize USDA food inspection standards as equal to its own. Some beef has already been sold through these channels, but amounts were limited until PNTR passed.
Most notable, the trade agreement granted many market-opening concessions to U.S. agriculture. Also critical is the three-year phase-in allowing U.S. processors to sell directly to wholesalers and retailers in China.
Already, China has agreed that as a condition of its membership in the World Trade Organization, it would remove a variety of trade barriers against the United States in agriculture, industrial goods, and services, and to reduce its restrictions on foreign investment. It would:
— Cut overall agricultural tariffs against U.S. priority products in half (including beef, grapes, wine, cheese, poultry, and pork) from 31.5 percent to 14.5 percent by 2004.
— Establish a tariff-rate quota system for imports of agricultural bulk commodities (such as wheat, corn, cotton, barely, and rice).
— For the first time, permit private trade of U.S. agricultural products inside China.
— Eliminate unscientifically based restrictions against American crops and livestock.
— End China’s agricultural export subsidies and reduce its own domestic subsidies.
“We understand that PNTR isn’t a panacea,” said National Cattlemen’s Beef Association President George Hall. “We also understand that its promises won’t occur overnight. We do know, however, that trade has become increasingly important to our industry.
The U.S. Congress has reviewed and approved China’s trade status every year since 1980. PNTR was initiated after China and the United States reached an unprecedented trade agreement last November.
China agreed to open its market, and in exchange it asked the U.S. Congress to waive annual review and grant it permanent favorable trading status.