WASHINGTON-As the high-tech industry hailed House approval of normalized trade relations with China last week, the prospect that a Senate vote could be delayed-or even blocked-loomed large as Senate Foreign Relations Committee Chairman Jesse Helms (R-N.C.) and his political opposite signaled their intention to fight a bill that otherwise has wide bipartisan support in the chamber.
“I don’t particularly relish raining on their parade, but I feel obliged to make clear that I do not intend to allow the Senate to simply rubber-stamp the president’s plan to reward the Chinese Communists in Beijing with permanent most favored nation trade status,” said Helms in statement.
While Helms lacks primary jurisdiction over trade in Congress, his seniority and foreign relations clout makes him a powerful political force.
At the other end of the political spectrum, Sen. Paul Wellstone, a liberal Democrat from Minnesota, indicated he wants to kill the legislation.
Political ramifications
In addition, organized labor-which spent millions of dollars to defeat China trade-is expected to try to influence the Senate debate.
“Congress has turned its back on the American manufacturing base and America’s working families … The Teamsters Union will reassess our support of any candidate who voted against working families today,” said James Hoffa, president of the International Brotherhood of Teamsters.
Siding with unions in opposing China trade are human-rights advocates, environmentalists and anti-globalists.
Despite Hoffa’s threat, there is no firm indication of China trade being an issue that will either hurt or help candidates this fall. At the same time, the matter has proved politically touchy for Democratic presidential candidate Al Gore and Rep. Richard Gephardt (D-Mo.), who would become speaker of the House if enough Democrats win in November.
A spokesman for Senate Majority Leader Trent Lott (R-Miss.) on Friday said a date for the vote on permanent normal trade relations with China has not been set.
For Lott, the possibility of a long, drawn-out fight on China trade could create logistical problems. Both the Senate and House are under heavy pressure to complete work on appropriations bills in a legislative session that will be shorter than usual to give lawmakers time to campaign.
“We are going to have a debate, Mr. Clinton. And, we are going to have votes-perhaps uncomfortable votes-on a range of issues relating to China,” Helms said. “In the end, China’s tyrants may-or may not-get the package Mr. Clinton has prepared for them.”
The package referred to by Helms represents an unprecedented trade opportunity for the U.S. wireless industry.
But the benefits likely will not be seen overnight.
Wireless concessions made by China will be phased in over time and are tied to China gaining membership in the Geneva-based World Trade Organization. That is now virtually assured as a result of U.S. and European Union backing.
Under the landmark U.S.-Sino trade agreement reached last November, China for the first time will allow foreign investment in wireless and other telecommunications services. China also has pledged to open its telecom equipment market on a technology-neutral basis.
Wireless details
Some wireless manufacturers, like Motorola Inc. and Lucent Technologies Inc., have been selling products to China in recent years.
This is how the U.S.-China trade deal shapes up for the wireless industry: China will allow 49-percent foreign equity in mobile voice and data services five years after China enters the WTO. Up to 50 percent foreign ownership in paging and value-added services in China will be permitted two years after WTO membership.
China also agreed to end geographic restrictions for mobile voice and data services in five years and in two years for paging and value-added telecom services.
A key to making U.S.-China telecom trade work will be the degree to which China adheres to global trading rules and enforces them-something that could be difficult for a nation unfamiliar with the notion of laws and contracts.
Nevertheless, China said it will embrace WTO telecom principles such as interconnection rights and independent regulatory authority.
The wireless industry, for its part, cheered a House vote that was not as close as predicted but one that literally opened the floodgates to trade with a country of 1.3 billion people-most without telephones.
“More exports to China mean more opportunities for American companies and more jobs for American workers,” said Christopher Galvin, chairman and chief executive officer of Motorola. “That does not mean we ignore the other issues that make U.S.-China relations so complex. But approval of PNTR strengthens our hand across the board in dealing with the complete range of issues bearing on our economic and national security interests.”
The Telecommunications Industry Association, which represents Motorola and other U.S. wireless suppliers, hailed the House vote and echoed other predictions that China will eventually surpass the United States as the world’s biggest wireless market.
“With passage of this legislation, U.S. communications companies are ensured of the ability to compete equally with other global firms in China’s domestic communications industry,” said Matthew Flanigan, president of TIA.
