China The Favored Nation

.. e United States by allowing United States to significantly reduce China’s quotas if China violates the agreement through transshipments. Charges by the United States Customs Service of illegal transshipments by China have led the United States on separate occasions since the signing of the agreement to reduce China’s textile and apparel quotas on specific products. The most recent incident occurred on September 6, 1996, when the U.S.T.R. announced that the United States would impose a $19 million dollar punitive charge against China’s 1996 textile quota allowance due to China’s repeated violations of the United States-China textile agreement dealing with illegal transshipments. China in turn has threatened to fight back by imposing restrictions on the importation of certain United States products.

I can only begin to imagine the great cost that it takes on a yearly basis to keep a watchful eye on the export practices of the Chinese textile and apparel industries. As if the problem of Chinese textile and apparel exports were not bad enough already there is information that would led to cast an even darker shadow on this portion of the Chinese economy. It is believed the use of forced labor is widespread and a long-standing and accepted practice in many parts of China. Evidence leads us to believe that China might be using forced labor on a large scale in hopes to increase its exports, and a significant number of these products may be for the United States. I have a problem with making people work against their will.

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I just think that it is just another form of slavery, and at all cost the United States should try to limit its dealing with nation who use economic practices that involve forced labor of any kind. Another problem with the Chinese exporting goods that may be produced in a forced labor environment is that it not legal. United States law prohibits importing goods or other commodities from any country produced through the use of forced labor, although getting actual proof of violations for certain imported goods is and will remain to be a very large challenge. In 1994 despite supposed violation, China’s most-favored-nation trade status was renewed. The renewal of China’s most-favored-nation trade status came with the ideal in mind that China would follow the guidelines on the use of prison labor that it had agreed to two years before.

In 1996 it was said that the progress that China had made in reducing the exports produced by prison labor export was good enough to warrant the renewal of most-favored-nation trade status. Only two years later the United States Customs Service confirmed that an iron firm in China had been using prison labor and then illegally exporting their product to the United States. As a result the United States Customs Service placed a important restriction on all product from that iron. So what does this mean? As I have shown cases where China does not follow rules that are to govern its most-favored-nation trade status, nothing more than a fine or non-acceptance of their product ever happens. I cannot say that I really see the point of the United States having some of the laws that it does.

Laws are written and then when they are broken they are not enforced to the severity to which they were broken. China is being treated like it has unconditional trade status. As of the last time I checked China has most-favored-nation trade status that is still very much conditional on many things. And it would appear that on more than one occasion the United States has caught China breaking laws, rules, or other governing factors that should at least result in some type of economic sanctions. But what happens is that every time that China’s most-favored-nation trade status comes up for vote they campaign really hard to convince us that they are really work to try to improve the condition of their nation.

So what ends up taking place is that when the United States tries to follow through with China’s punishment for doing something wrong they then make threats to turn it all around and counter attack us. We try to enforce agreement that they have signed and we end up in an economic power play. To solve this one of several things needs to happen. First, just accept the fact they were caught trying to sneak around United States Customs laws and take the according penalty. Second, the United States must sticks to the agreement and pacts that it has made with China. When a violation is committed the United States just does what it should do by fining or posing other such penalties for that said action, and it does not worry about the possibility of counter threat from China. Third, would be to just step back from a crack down of Chinese infractions and rework our foreign trade status policies.

In particular, Congress would have to reword or void Title IV of the Trade Act of 1974, commonly known as the Jackson-Vanik Amendment. Which prohibits the President of the United States from granting most-favored-nation trade status to China on a permanent, unconditional basis. Heck, since the United States has not cared enough to pull most-favored-nation trade status from China why not grant unconditional trade status to the People Republic. I do not know which of the three above ideas is the best, but I do have a very interesting thought about the first one. If the United States is going to stand by and let China break the agreement that we have set then what is the point of having these rules or laws in the first place? If we can accept the fact that China is breaking our laws then we can also understand that this behavior can very well lead to a state of anarchy and lawlessness.

These are all things that are breed by a lack of law, and also facilitated by a lack of proper enforcement of our current laws. This is a warning also for the future as we show China that the United States will not stand for the flagrant breaking of its laws. United States policymakers employ economic sanctions not only to equalize trade and investment disputes, but also to reach non-economic policy objectives. This has been especially true with respect to China. Currently, the United States imposes the following economic sanctions on China.

Restrictions on export licenses are things that the United States may deny if it was determined that the product could make a direct and significant contribution to the development of nuclear weapons and their delivery systems, electronic and submarine warfare, intelligence gathering, nuclear power projection, and air superiority. This restriction was placed on China on November 23, 1984. Another restriction placed on China dealt with the withholding of generalized system of preferences status. Section 502(b)(1) of the Trade Act of 1974 prevents the President of the United States from designating any developing country as “dominated or controlled by international communism” as a beneficiary of tariff reductions under this program. This restriction took place on January 1, 1976.

Section 902 of the Foreign Relations Authorization Act for Fiscal Years 1990 and 1991 deals with the suspension of nuclear trade and cooperation with China. This sanction was set on February 16, 1990 and may be lifted if the President determines that China is making political reforms that reduce oppression of the people of Tibet. On June 5, 1989 President Bush suspended government-to-government and commercial arms sales to China. Also in June of nineteen eighty-nine President Bush directed the United States directors at the World Bank and the Asian Development Bank to seek postponement of new multilateral development bank loans to China. The Suspension of Overseas Private Investment Corporation (OPIC) and Trade and Development Agency (TDA) activities took place on February sixteenth nineteen-ninety. Section 902 of the Foreign Relations Authorization Act for fiscal year 1990 and 1991 expressed suspension of first the granting of O.P.I.C.

insurance, reinsurance, financing, or guarantees to China and second the obligating of T.D.A. funds for new projects in China. This sanction is not unlike many others placed against China, in that it may be lifted if the President of the United States determines that China is making political reforms in Tibet. In addition Section 902 of the Foreign Relations Authorization Act for Fiscal Years 1990 and 1991 talks about the prohibition of the export of items on the Munitions Control List, and of United States satellites. This sanction placed in February of 1990 can be lifted if political conditions improve between China and Tibet. Another restriction placed on China by the United States on February 16, 1990 dealt with the prohibition of export licenses for crime control and detection equipment.

This is among the long list of restriction placed against China in the fiscal year of 1990 in hopes to get China to change it political attitude towards Tibet. Again there is more mention of restriction against certain imports produced by prison labor. The Customs Bureau has enforced Section 307 of the Tariff Act of 1930, which forbids imports made by forced of prison labor goods. Examples pf such forced labor are diesel engines manufactured by the Golden Horse Diesel Engine Factory, March twenty-third nineteen ninety-two; tea grown by the Red Star Tea Farm, July thirteenth nineteen ninety-two; sheepskin and leather processed by the Qinghai Hide and Garment Factory, July thirteenth nineteen ninety-two; and again iron pipe fittings manufactured by the Tianjin Malleable Iron Factory, April 29, 1996. On May 28, 1984, restrictions on the importation of Chinese munitions and ammunition.

In conjunction with the 1994 annual renewal of China’s most-favored-nation trade status, United States President Clinton prohibited the importing of arms and ammunition from the Peoples Republic of China. These are only some of the many economic restriction that have been placed against the People’s Republic of China. Talk about a very complex system of checks and balances, used to keep the economic practices of China under control. In Conclusion, it should now be obvious that the issues around China’s most-favored-nation trade status are both very complex and multi-dimensional. I have mearly tried to provide the issues on both sides of the debate that surrounds the China’s most-favored-nation status.

By giving stats and other figures that show just how this issue has the ability to effect the economies of both the United States and China. European History.


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