Alaska's congressional delegation divided on normalizing China trade

Posted: Monday, May 22, 2000

FAIRBANKS (AP) -- Alaska's congressional delegation will likely vote without a unified voice when asked to decide whether to establish permanent normal trade relations with China.

Sen. Ted Stevens says he will vote for the measure. Sen. Frank Murkowski is leaning toward a ''yes'' vote. But Rep. Don Young will vote against the bill. Both the House and Senate could vote on the question in the coming week.

The state of Alaska has much to gain and little to lose economically from opening China's markets to its resources, according to some observers. Alaska's big industries -- fish, seafood and timber -- would have vast new markets, they say.

At the same time, the state has few of the manufacturing jobs that are most likely to be lost if U.S. companies move factories to China.

Still, Young balks at freer trade because of his concern that China uses U.S. resources mostly to bulk up its increasingly aggressive military. He also worries about potential job losses across the nation.

Stevens said he understands Young's concerns but believes the better course is to build connections and avoid antagonizing China.

And Murkowski is waiting to see what sort of legislation comes from the House before committing, according to his press aide. However, Murkowski has always voted in past years to extend ''most favored nation'' trading status to China.

The debate is all about establishing what is called ''permanent normalized trade relations'' with China.

The disputes in Congress are more intense this year because business interests see the possibility of a much larger breakthrough.

China has applied to join the World Trade Organization and, as part of that process, has agreed to reduce tariffs and other bureaucratic blocks on imported goods and to allow foreign companies in as distributors. To benefit from these concessions, though, the United States must grant China permanent normal trade relations, something all WTO members offer to others when they become members.

''We believe that China's entry into the WTO would be extremely positive for the United States,'' said 42 governors, including Alaska Gov. Tony Knowles, in a March 31 letter to members of Congress. ''The opening of China's markets will create numerous opportunities for our nation.

Alaska already trades with China. Businesses in the state sent about $111 million of material -- mostly oil and seafood -- to China last year.

The Alaska oil is sent to China by BP Exploration (Alaska) Inc. That trade began just a few years ago, after Congress lifted the ban on exports of North Slope oil in 1996. The next year, the value of Alaska's total exports to China shot up by 33 percent as $126 million of oil flowed eastward. The oil shipments have since declined in value, but at $56 million, still represented the largest Alaska export to China in 1999.

After oil is seafood. Exports to China in 1999 were $49 million, and seafood companies are working for much more. For example, the Alaska Seafood Marketing Institute has just finished a training program for 50 sous chefs in 35 Shanghai hotels, featuring Alaska black cod, Dungeness crab and other seafood.

Beyond oil and seafood, Alaska has sent little to China in recent years -- just a few million dollars of fertilizer, animal feed, and timber, plus a few potatoes from the Interior and Southcentral. Farmers sent the potatoes in 1996 and 1997 under a special permit from the Chinese government, according to Jenifer McBeath, a University of Alaska Fairbanks professor of plant science. The farmers hope to develop a regular business with a seed company in China.

These Alaska products would become less expensive, and presumably more in demand, if China and the U.S. begin operating under the U.S.-China Bilateral WTO Agreement.

Enthusiasm from various business interests, however, hasn't created enough enthusiasm in Congress to guarantee passage of normalized trade with China. The agreement seems likely to pass the Senate, but, according to vote counts by the National Journal's Congress Daily, the House vote could go either way.



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