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Thursday, 25 May, 2000, 09:34 GMT 10:34 UK
China hails trade deal
Congress has been the focus of protests all year
Congress has been the focus of protests against the deal all year
The Beijing government has praised the "wise" vote by the US House of Representatives to normalise trade relations with China, but has reacted with anger to some of the conditions attached to the bill.


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
US lawmakers voted by a clear majority to grant China permanent normal trading relations (PNTR), which paves the way for China becoming a member of the World Trade Organisation.

However, they also voted to set up a commission to monitor China's human rights record which could recommend sanctions compatible with WTO rules.

China wants to modernise its economy
China wants to modernise its economy
A spokesman for the Chinese Trade Ministry, Hu Cusheng, said these conditions were "unacceptable to the Chinese government" and called on the US to "correct its wrongdoing, so as to ensure a healthy and smooth development of China-US economic cooperation and trade".

'Historic step'

In the United States, congressmen had called the vote one of the most important in their legislative careers.

The approval of the trade bill represents a political victory for President Bill Clinton, who had lobbied for months to get the measure approved.

US companies want to invest more in China
US companies want to invest more in China
He said trade bill represented an "historic step towards continued prosperity in America, reform in China and peace in the world".

"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", Mr Clinton added.

US industry praises deal

John Sullivan, vice president of the American Chamber of Commerce in Beijing, said PNTR would "create a more stable, predictable and consistent environment within which the Chinese can make their reforms".

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
US businessmen, however, warned against overblown expectations.

Howard Dale, China manager for US firm CNH Global, the world's largest maker of tractors and combines, said: "Everything is not going to happen overnight, it's going to be a step-by-step process."

Jeffrey Kennedy, a Beijing-based consultant with McKinsey, said he was not surprised that the bill went through "because it really would have hurt US business otherwise".

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

WTO hurdles

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".

Mr Moore said the House of Representatives had given "a major vote of confidence to a rule-based trading system, a system which encourages openness and accountability".

Attention will now focus on the remaining hurdles that China has to take 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.

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

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.

 WATCH/LISTEN
 ON THIS STORY
Bill Frenzel, ex-congressional GATT representative
"A very good treaty"
The BBC's Phillipa Thomas
"Prosperity could be on the Chinese side"
Republican Dana Rohrabacher
"They think we are suckers"
See also:

25 May 00 | Business
US clinches China trade deal
10 May 00 | Business
US trade battleground
24 May 00 | Business
Why the US trade vote matters
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
25 May 00 | Business
Hong Kong hopes for trade boost
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