PNTR footnote -- nonapplication clause

Michael Pollak mpollak at panix.com
Wed May 17 10:39:48 PDT 2000


A GAO report (at http://www.gao.gov/new.items/ns00094.pdf) explains what happens if PNTR is voted down. In short, China will still join the WTO (when it gets done negotiating with the EU), but America will invoke the WTO's "nonapplication clause," which means that the two countries will deal with each other on a non-WTO basis for the foresesable future. China will deal with all other countries on the basis of the WTO agreements.

<excerpts>

The administration plans to ask Congress to agree to grant China permanent normal trade relations before the China joins the World Trade Organization. If Congress does not do this, the administration plans to invoke a WTO provision, called the "nonapplication clause," which would permit the United States and China, as an incoming member, to not apply WTO trade liberalizing commitments and obligations to each other. The administration believes this is necessary to avoid a conflict between current U.S. Law, which requires annual approval of China's normal trade relations status, and the U.S. obligation as a WTO member to provide unconditional most-favored-nation status to other members. Should the United States invoke the nonapplication clause, U.S. trade relations with China would continue to be based on a 1979 U.S.-China trade agreement and other bilateral agreements. [FN: Nonapplication may be rescinded later.] (p.5)

p15. FN 13: At least one commentator believes that the current annual process is not inconsistent with the WTO requirement to provide most-favored-nation status to other WTO members so long as the United States continues to provide the grant every year and eliminates the condition that the President make annual emigration findings with regard to China. Althogh it is true that there have been no WTO rulings on this issue, one problem with this position is that even with the emigration condition eliminated, China would still be treated differently from other WTO members.

</excerpts>

__________________________________________________________________________ Michael Pollak................New York City..............mpollak at panix.com



More information about the lbo-talk mailing list