Playing the China Card in Congress

The captains of industry are wearing out their tasseled loafers in the halls of Congress, creating the votes needed to approve China's entry into the World Trade Organization. This is when the rubber meets the road, palms are greased, deals are made, campaign contributions are rounded upwards. It all happens behind closed doors, in beautiful lofty rooms with polished wood, leather chairs and cut flowers, and, in the end, it all happens at taxpayers' expense.

But times are tough all over, and the captains of industry have taken some bad hits lately, that make this effort an uphill battle.

Are the Chinese simply scofflaws? Or are they just the worst lobbyists ever?

In January, one of China's chief trade representatives said promises to US wheat exporters are just "theoretical opportunity," and not a promise to buy our grain at all.

The remark was a blow to the captains of industry and the Republican leadership, because farm state members of Congress had just asked China to step up US agricultural purchases as a sign of good faith.

For the past 25 years, our farm policy has been based on promises of increasing exports which have never materialized. The US is suffering the worst crisis of farm income since the Great Depression, and everyone from President Clinton to Governor Mike Johanns (R-Neb.) keeps insisting that opening trade with China is going to save our country's farmers.

In early February, according to a grain trade paper, Feedstuffs, "South Korea, a steady US corn buyer, backed away from a couple of shipments of US corn. Sources said China probably got the contract instead." In a report issued February 11, China is projected to increase corn exports by 3 million tons a year.

According to Paul Magnusson in Business Week, the badly-timed remarks of the Chinese trade minister may have been meant for Chinese ears alone. In late January, another trade minister said the Chinese government is trying to convince Chinese industry and farmers that they too will benefit from WTO entry -- "a win-win situation for the two countries but not a big gift from China to the US."

The same spin doctor, in the same interview, promised "wave after wave" of Chinese buyers will be visiting the US. Soon. Honest.

China routinely violates, ignores and "reinterprets" unilaterally its international commitments. According to Magnusson, "Beijing has jailed political dissidents and religious leaders days, even hours, before State Department dignitaries ... arrived in the capital. Middle Kingdom rulers seem to time their sales of sensitive missile technology to coincide with Capitol Hill votes on maintaining normal trade relations with China."

Despite China's long history of broken promises, the corporate lobby is seeking Permanent Most Favored Nation (PMFN) status as a key part of the entry of China into the WTO.

Small business coalitions like the US Business and Industry Council oppose PMFN and want to preserve US leverage (mostly in the form of annual Congressional reviews of China's conduct) which is a part of the 1979 bilateral China-US agreements.

The captains of industry are mostly interested in relocating production -- yes, that's US jobs we're talking about here -- to China and importing goods back into the US. The multinationals want to lock in permanent, unconditional access to US markets for goods produced in China and for service sector businesses in China which employ Chinese and service Chinese customers.

The Chinese are serious as death about food self-sufficiency and strongly resist importing food except when drought or other production disasters are overwhelming. When China refuses to allow in US wheat or other product, in spite of "promises," Congress, unless it gives away its authority by granting PMFN, could impose some countervailing penalty against goods made in China -- say K-Mart products or "US" autos assembled in China by cheap Chinese labor.

That's why the captains of industry want PMFN for China. PMFN is the insurance the multinationals need for the inevitable day when China, if admitted, violates some of its WTO commitments. Without PMFN, Congressional sanctions could be implemented which would prevent these multinational corporations from importing their cheap Chinese-made goods back into the lucrative U.S. market.

The multinational corporations manage the U.S. trade agenda through hefty campaign contributions to key members of Congress. Unless we get serious about campaign finance reform, the captains of industry, with their deep pockets and bottomless cynicism, will buy more of this same failed trade model, pitting workers and ag producers around the world against each other in the international race to the bottom of the economic barrel.

Given China's track record, and the obvious agenda of the corporate supporters of PMFN, it is foolish to imagine that China will be any kind of bonanza to US exporters of commodities or manufactured goods.

In fact, the captains of industry understand this very well. These are not the kind of guys who go around wearing out their very expensive shoe leather for nothing.

Herrin is Education & Communications Director of the Nebraska Farmers Union, P.O. Box 22667, Lincoln NE 68542-2667; or email

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