The American InterestrnPeking, the White House, andrnWall Street Versus Main StreetrnIn tlie last week of May, the Clinton administrationrnsuccessfully pressed Congressrninto granting China permanentrnnormal trade relations (PNTR) status asrnpart of a recenth’ negotiated trade pact.rnWith that vote—the result of an unholyrnalliance between the GOP and thernWhite ftouse—American legislatorsrnhave given up their annual review ofrnPeking’s conduct, surrendering all congressionalrnleverage over China policy. Atrna time when the balance of foreign policyrndecisionmaking has already shifted toornfar in favor of the executive branch, thernRepublican-controlled Congress has votedrnitself into inconsec[uence on an issuernthat is important to this country’s interests.rnPNTR status for Ch ina was neitherrnmerited nor necessary. It is against thernU.S. national interest. The members ofrnCongress who supported PNTR were effectivelyrnsiding with corporate special interestsrnagainst American workers andrnconsumers. The White House, Peking,rnand Wall Street were allied against ordinaryrnAmericans for several reasons: ThernClintonites’ motives will become fullyrnknown only when the next campaignrnfundraising scandal hits the headlines;rntlie Chinese government wanted PNTRrnas a means of uncondihonal, unlimited,rnand permanent access for Chinese-maderngoods into the U.S. market; and American-rnbased multinational corporationsrnwanted PNTR because it would fiicilitaternrclocahng production to China and exportingrnproducts back to the UnitedrnStates.rnThe damage to American interests willrncome from cheap labor, almost nonexistentrnenvironmental controls, and low taxes,rnwhich make China an ideal relocationrnsite. Big corporations love the factrnthat independent trade unions are illegalrnin China, and that manufacturing wagesrnaverage 20 cents per hour and go as lowasrn13 cents per hour. Their real interest isrnnot in selling things in China, becausernonly a narrow stratum of its political andrnbusiness elite has meaningful spendingrnpower by Western standards. But PNTRrnensmes that these U.S. multinationalsrnhave unconditional, permanent access tornby Srdja Trifkovicrnthe American market, to sell to us goodsrnstill “Made in the U.S.A.”rnIn the aftermath of the PNTR’s passage,rnthe websites of American multinationalrncorporations verily gushed aboutrnturning the People’s Republic into a lowwagernproduction base. Procter-Gamble,rnMotorola, and Westinghouse state openlyrnon their sites that they plan to substituternChinese parts for the Americanmadernones they currently send to Chinarnto put into finished goods. The predictablernresult will be a loss of high-wagernAmerican manufacturing jobs. Companiesrnsuch as General Electric, Kodak,rnDow Chemical, and Ingersoll-Rand havernindicated that they will supply the U.S.rndomestic market with exports from theirrnChinese factories.rnSupporters of China’s WTO and PNTRrnagenda typically assert that the jobsrnlost to trade witii China are low-skill, lowwagernpositions, while expanding exportsrnto China will create high-wage U.S. jobs.rnBut China is moving beyond labor-intensiverngoods. Between 1992 and 1999,rnhigh-tech products more than tripled as arnshare of China’s exports to the UnitedrnStates, to 14.5 percent; they rose morernthan 32 percent last year alone. In contrast,rnAmerican high-tech products rosernonly from 34.5 percent to 35.9 percent ofrnour total exports to China, and they fellrn18 percent in absolute terms in 1999.rnNow, thanks to PNTR and planned investmentsrnby Cisco, 3Com, Lucent, Microsoft,rnUnited Technologies, Motorola,rnand Texas Instruments, American andrnworld markets will be flooded with hightechrnChinese goods: broadband routers,rntelecommunications switches, semiconductors,rnservers, software, and aerospacernengine parts.rnWall Street’s attack on America’s manufacturingrnbase is accompanied bv a similarrndisregard for our national securit}-.rnChina is able to gather our dual-use militaryrnresearch-and-development secrets almostrnat will. Lockheed Martin stands accusedrnby the State Department of 30rnviolations of the Arms Export Control Actrnand International Traffic in Arms Regulationsrnfor selling advanced-missile technologyrnto the People’s Republic. U.S. defenserncorporations McDonnell Douglasrn(Boeing), Lockheed Martin, Loral Spacern(Lockheed), and Hughes Electronicsrn(General Motors) are cither under indictment,rnawaiting indictment, or under currentrninvestigation by the Justice Departmentrnfor illegally passing rocket andrnsatellite teehnolog}’ to China.rnIn the run-up to the vote. PresidentrnClinton insisted that PNTR “creates arnwin-win result for both countries.” He arguedrnthat exports to China “now supportrnhundreds of thousands of American jobs”rnand that “these figures can grow substantiallyrnwith the new access to the Chinesernmarket the WTO agreement creates.” Inrnfact, U.S. multinationals have turnedrnfrom net exporters to China to net exportersrnto the United States, a gap that villrnonly widen and contribute to the growingrnU.S. trade deficit. Already the traderndeficit with China is some $70 billion. Inrn1999, the United States imported approximatelyrn$81 billion in goods from Chinarnand exported $13 billion —a six-to-one ratiornof imports to exports that representsrnthe most unbalanced relationship in thernhistory of U.S. trade.rnPNTR was not even necessary for thernattainment of Mr. Clinton’s stated objectives.rnEven without granting it, U.S. exportersrnstill would have obtained the potentialrntrade benefits of China’s entry intornthe WTO under the 1979 U.S.-ChinarnAgreement. Thus, claims by the administrationrnthat U.S. exports would not havernqualified for significant tariff cuts afterrnChina’s WTO entry, or that U.S. businessesrnwould still face domestic contentrnor performance requirements, are simplyrnnot true.rnThe United States had nothing to losernby maintaining the annual review andrntaking a “trust but verify” approach torntrade with China. But now, the UnitedrnStates stands to lose plenty: its trade enforcementrntools and the leverage of thernannual congressional review of China’srnbehavior. PNTR should not have beenrnwithheld on the grounds of “humanrnrights” violations: That would necessitaterncurtailing trade with all oil producing nationsrnin the Middle East, among others.rnIt should have been opposed, however,rnon the grounds of protecting the U.S. nationalrninterest, preserving what remainsrnof the American industrial base, and reducingrnAmerican trade deficits. But thernGOP, the Clinton-Gore White House,rnand Wall Street are not motivated byrnsuch old-fashioned concerns.rnAUGUST 2000/41rnrnrn