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Thursday, 25 May, 2000, 08:00 GMT 09:00 UK
US clinches China trade deal
Congress has been the focus of protests all year
Congress has been the focus of protests against the deal all year
The US House of Representatives has narrowly voted in favour of normalising trade relations with China.

The House approved the legislation granting China permanent normal trading relations (PNTR) by 237 to 197 votes after more than five hours of emotional debate.

The decision represents an important step for China in its efforts to join the World Trade Organisation.

Today the House of Representatives has taken an historic step towards continued prosperity in America, reform in China and peace in the world

President Bill Clinton
The vote also represents a political victory for President Bill Clinton. He has lobbied relentlessly for months to get the measure approved.

Mr Clinton argued that it would be good for the US economy and would consolidate the process of political and economic reform in China.

Opponents of the move - including American trade unions - said it would cause big job losses in the US and undermine Chinese workers' rights.

This is a vital step in bringing China into the family of governments that make up the World Trade Organisation

Mike Moore, WTO director general
China hailed the House of Representatives vote as "wise", but a trade ministry spokesman said that provisions in the US bill to set up a commission to monitor Beijing's human rights record were "unacceptable".

The WTO's director general, Mike Moore, hailed the vote as "a vital step in bringing China into the family of governments that make up the World Trade Organisation".

Next WTO steps

China still has to take a number of hurdles before it can become a WTO member.

Approval of the PNTR in the US senate is seen as a formality.

However, China still needs to reach bilateral market access agreements with several countries including Costa Rica, Ecuador, Guatemala, Mexico and Switzerland.

'Good day for America'

President Clinton welcomed the House's decision.

"Today the House of Representatives has taken an historic step towards continued prosperity in America, reform in China and peace in the world."

Democratic Congressmen led protests in Washington
Democratic Congressmen led protests in Washington
Mr Clinton said that with more than a billion people, China is the biggest new market in the world and the US had won access to it.

"Our administration has negotiated an agreement that will open the Chinese market to American products made on American soil. By this agreement, we will also export one of our most cherished values, economic freedom.

"For China this agreement will clearly increase the benefits of co-operation, and decrease the benefits of confrontation," Mr Clinton said.

He concluded that it was "a good day for America".

'Sound trading'

Wednesday's vote ends 20 years of annual congressional reviews of China's trade status with the United States.

US companies want to invest more in China
US companies want to invest more in China
The annual review was used to try to pressure Chinese governments on such issues as human rights.

The approval for PNTR came after the failure of a last-ditch effort by opponents to add wording to the bill that would withdraw China's trade privileges if Beijing launched military action against Taiwan.

The bill guarantees China the same low-tariff access to US markets that most other countries in the world have. In return, China has undertaken to open its markets to US businesses.

China has reached trade-opening deals with all its major trading partners and US businesses stood to lose out to their global competitors if the bill had not been passed.

American corporations have spent millions of dollars lobbying in favour of the bill.

The Chinese Government had said that only by repealing the US legislation that requires the annual review can the two nations have a sound relationship.

"It will not only boost the economic development and trade between China and the United States but will also have a good impact, create the conditions for the sound and healthy development of China-US relations," said Chinese Foreign Ministry spokeswoman Zhang Qiyue.

The opposition

Many union leaders had been sceptical of any trade deal with China, and wanted to retain the right to judge China annually on its record on human rights and labour standards.

Unionists attended a rally on the steps of the Capitol building on Wednesday, holding placards saying "880,000 jobs to China - yours could be next."

Labour rights in developing countries are an issue
Labour rights are a big issue
Harry Wu, a Chinese human rights activist, called on Congressmen to "vote for your conscience, not just for profit."

His words were taken up in the Congressional debate by independent Congressman Bernard Sanders of Vermont, who said the debate was about two words: "corporate greed".

The experience of the North American Free Trade Agreement (NAFTA), which many blame for job losses to Mexico, had reinforced the resolve of the critics.

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See also:

10 May 00 | Business
US trade battleground
18 May 00 | Business
Business lobbies hard on China
23 May 00 | Business
China's US trade critics
10 May 00 | Business
Veteran US leaders back China deal
19 May 00 | Business
Analysis: China's WTO hopes
23 May 00 | Business
China trade vote hots up
24 May 00 | Business
Why the US trade vote matters
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