The debate over whether the U.S. Congress should grant Permanent Normal
Trade Relations (PNTR, formerly known as permanent most favored nation)
status is about many things, but none more important than this basic
question. The vote on PNTR is intertwined with a U.S.-China bilateral
trade deal that contains tariff concessions and deregulatory measures
designed to aid U.S. business, and with China's accession to the World
Trade Organization (WTO).
This should not be a hard question to answer. Opening the economy further
to U.S. and other multinational corporations and deregulating the economy
further will exacerbate the worst social and economic tendencies in China,
while undermining many of the country's important achievements of the past
As NAFTA proponents argued about Mexico, PNTR proponents can fairly say
that China is already open to foreign business. But as with NAFTA, PNTR is
about corporate investment as much as the trade in goods. U.S. business
wants the certainty that comes from the China trade deal and Chinese
membership in the WTO, and the progressive elimination of the many
barriers to foreign investment in China.
Most of the hardships that large numbers of Chinese people will experience
if PNTR is granted and China joins the WTO are not seriously disputed:
Ten million or more peasants will be thrown off the land, as
agricultural supports are withdrawn.
Millions of workers will lose their jobs as state enterprises wither in
the face of foreign competition, or downsize and speed up operations in an
effort stay competitive.
Social service provision will be decimated. Healthcare, education,
pensions and other such services have long been provided by employers --
duties that state employers no longer want or can afford in the face of
foreign competition. Foreign private corporations are generally not
interested in taking on social service provision responsibility.
As a result of these and other factors, there will be a surge in income
and wealth inequality, exacerbating dangerous trends already underway.
Foreign tobacco companies will gain greater access to the Chinese
market, which almost certainly means there will be a rise in smoking rates
among women (traditionally non-smoking in China) and children. Because of
the vastness of China's population, even small increases in smoking rates
may result in millions of excess tobacco-related deaths.
China will progressively lose the ability to employ the protectionist
tools that have enabled it to grow at such rapid rates in recent decades,
and to weather the Asian financial crisis with minimal hardship.
Corporate proponents of PNTR counter that the economic boom that will
follow from PNTR will balance out the harms to workers and farmers -- that
these transition costs are an unavoidable cost of modernization. But there
is little evidence to support these claims, and even if PNTR
hypothetically did spur economic expansion -- a contention we find
implausible -- it would still occur amidst worsening economic inequality,
a worsening of poverty and shredding of the social safety net.
Strangely, despite the cheerleading from Big Business for PNTR and the
acknowledged harms (no small thing to shunt aside), some progressives have
offered support for PNTR. They contend that it is inappropriate for the
United States to treat China differently than other nations, absent a call
from Chinese workers and farmers for such differential treatment. But
there are almost no independent mass organizations in China, nor even
non-governmental organizations. Who exactly do these progressives look to
issue such calls?
Another strand of progressive criticism of PNTR opposition rejects
"protectionism." But it is perfectly appropriate for U.S. unions and
others to protect the interests of U.S. workers, especially against the
ravages of corporate globalization. PNTR will cost domestic manufacturing
jobs and enhance the downward pressure on U.S. wages by making it easier
for U.S. manufacturers to produce their goods in Chinese sweatshops. It
promises few if any new jobs for workers in the United States. Big U.S.
corporate winners from PNTR in the financial and service sectors will
create virtually no jobs in the United States as they gain market share in
China. And most of the manufacturers who hope to sell goods to the
emerging middle class in China intend to make those products in China.
PNTR and China's accession to the WTO may be a winning deal for the
Fortune 500, but it is a lose-lose proposition for people in both China
and the United States. Opposing PNTR is an easy call.
The PNTR vote in Congress is neck and neck. You can make a difference by
making a call of your own. Call your representative at 1-877-722-7494
(toll free), and urge them to vote "no" on PNTR.
Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter. Robert Weissman is editor of the Washington, D.C.-based1310Multinational Monitor.