Tuesday September 19 1:07 AM ET

Senate to Pass China Trade Pact in Historic Vote

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By Adam Entous

WASHINGTON (Reuters) - In a victory for big business that could transform Sino-U.S. relations, the U.S. Senate Tuesday will give final approval to a hotly contested bill granting permanent normal trade relations to China despite stiff opposition from organized labor and human rights groups.

One of President Clinton's top foreign policy objectives for his final year in office, the legislation would bring to an end the 20-year-old annual ritual of reviewing China's trade status and guarantee Chinese goods the same low-tariff access to the U.S. market as products from nearly every other nation.

In exchange for the benefits, China agreed to open a wide range of markets, from agriculture to telecommunications, under the terms of a landmark agreement setting the stage for Beijing to join the World Trade Organization (WTO) later this year.

A bitterly divided House of Representatives approved permanent normal trade relations in May after an unprecedented lobbying campaign by pro-trade business groups eager to tap the vast Chinese market place, potentially the world's largest with 1.3 billion consumers.

The White House said final passage by the Senate would mark a turning point in relations between the world's richest and most populous nations, comparing it to former President Richard Nixon's milestone 1972 visit to China.

``Granting PNTR for China not only provides tremendous economic opportunities for U.S. workers, farmers and businesses, it is also the best way to promote reform in China and stability in the region,'' U.S. Trade Representative Charlene Barshefsky said.

There was never any real doubt about the outcome in the Senate, where free-trade initiatives typically garner broad bipartisan support. A Reuters poll showed at least 70 of the chamber's 100 senators would back the measure in Tuesday's long-awaited vote.

Senate passage will bring an end to this year's biggest legislative battle, which pitted organized labor against big business. It was the most heated trade fight since the passage in 1993 of the North American Free Trade Agreement, which tore down barriers between the United States, Mexico and Canada.

Labor unions put up little resistance to permanent normal trade relations in the Senate.

By contrast, labor mounted an aggressive grass-roots campaign in the House, warning that the pact could cost hundreds of thousands of American workers their jobs as Chinese goods flood the U.S. market and companies move their factories to China to take advantage of lower wages.

Other opponents said the bill would exacerbate an already huge U.S. trade deficit with China, which hit a record $68 billion last year.

A small but determined band of China critics tried to scuttle the bill in the Senate by bogging it down with amendments -- the most contentious of which would have imposed sanctions on Beijing for its alleged role in weapons proliferation.

But the amendments were soundly defeated, clearing the way for final passage.

``This legislation means that we've overcome the rising forces of protectionism,'' said Jerry Jasinowski, president of the National Association of Manufacturers.

Historic Shift In Relations

White House officials said China's accession to the Geneva-based WTO would bolster national security by encouraging economic and political reform in China.

Business groups, which spent millions of dollars lobbying lawmakers, said it would create high-paying jobs in the United States. The Farm Bureau predicted that it could double agricultural exports to China.

In addition to granting permanent trade benefits to Beijing, the bill would set up a special commission to monitor human rights in China. The panel could also recommend sanctions, such as a halt to U.S. Export-Import Bank and U.S. Overseas Private Investment Corp. support for Beijing.

China has already protested what it sees as U.S. interference in its internal affairs.

In two weeks of Senate debate, Beijing's critics lashed out at Clinton for striking a deal with a Communist regime they accused of threatening Taiwan, proliferating weapons of mass destruction and oppressing its own people.

Minnesota Democrat Paul Wellstone called the trade bill a ''virtual wish list for multinational corporations.''

West Virginia Democrat Robert Byrd called the Senate vote a ''sellout.''

``Are we to turn a blind eye to every deeply held principle we have as a people about justice and freedom and right and wrong, with pie-in-the-sky promises of economic gain? I hope not. That would be much, much more than a sellout. That would be a shame,'' Byrd said.

-- (hmm@hmm.hmm), September 19, 2000