Trade relation changes with China help American farmers

By DAN GLICKMAN

While most of the nation enjoys nearly unprecedented prosperity, many of our farmers and ranchers find themselves in a daily struggle for survival. Low prices, recession abroad and natural disasters have all combined to devastate American agriculture over the last few years. This is a time when we need to pursue every new opportunity available to farmers, especially export opportunities, which farmers depend on more than twice as much as the rest of the economy does.

Against this backdrop, congress is preparing to decide whether to grant China Permanent Normal Trade Relations (PNTR), a designation that would allow the United States to enjoy the benefits of China’s prospective membership in the World Trade Organization (WTO).

China is home to one of every five people on earth. Its economy is growing at a seven percent annual clip. With state economic control gradually giving way to private enterprise, Chinese people are enjoying higher incomes and greater consumer power than ever before.

But a relatively closed Chinese market means that our farmers are not able to tap into the full strength of that consumer power. During the last fiscal year in fact, every man, woman and child in China consumed less than a single dollar’s worth of American agricultural goods. That is compared to $22 a person in the European Union and $92 a person in Japan. The entire U.S./China trade relationship is wildly out of balance, with China selling us five times more in total goods and services than we sell them.

In joining the WTO, the China would agree to abide by the accepted rules of international trade. They would eliminate government export subsidies, which give their farmers an unfair advantage in the global marketplace. They would cut tariffs dramatically. In many cases, their tariffs would be lower than those assessed by our traditional trading partners. And China would also allow trade to be conducted between private individuals without the interference of government middlemen.

All told, by 2005 China’s membership in the WTO could mean an additional $2 billion a year in U.S. farm exports. And that is a conservative projection.

The first question many Americans ask when our trade negotiators bring home a new agreement is, "What did we give up?" In the case of the China-WTO deal, the answer is, "Absolutely nothing."

Unlike NAFTA where we had to give in order to get, all the concessions here are on the Chinese side. All the benefits are on ours. We have nothing to lose by passing PNTR or by bringing China into the WTO.

Perhaps more importantly, we have everything to lose by rejecting it. A "no" vote on PNTR is a vote for a kind of unilateral economic disarmament. American farmers and workers would lose the opportunity for increased sales and potential new jobs, while our competitors in the European Union, Canada, Australia, Japan, Latin America and elsewhere fill the orders that could have been ours.

Increased trade with China does not mean acceptance of its governing regime and political philosophy. The Clinton Administration believes that the Chinese record on human rights is disturbing, and we remain concerned about their lax labor standards and their recent threats toward Taiwan. But we also believe that isolating China would move us further away from solving these problems. By bringing the Chinese into the global economic community and exposing them to our values, we can influence their behavior. If we help China become a more open economy, eventually they will become a more open society.

As important as it is to boost exports, there is more at stake here than dollars and cents. We cannot call ourselves the world’s only superpower if we disengage from the world’s most populous nation just as it is preparing to institute wholesale political, economic and social reforms. We must remember that China is a nuclear power that holds the key to peace and stability in Asia. It is absolute folly to isolate ourselves from such an emerging global power. For our national security as well as our economic security, we must engage China.

The decision about PNTR may be the biggest test yet of our nation’s commitment both to the global economy and to global security in the 21st century. It is imperative that we pass the test by passing PNTR.