Clinton China Trade Decision Relieves Uncertainty for U.S

Article excerpt

For Jeff Block and thousands of other executives at companies across the country, President Clinton's decision Thursday to maintain low-tariff status on imports from China is bringing relief from months of wrenching uncertainty.

Block's American Pacific Enterprises Inc., a Columbus, Ohio-based textile marketer, has prospered by selling low-cost, high-quality bed quilts and other Chinese-made goods to U.S. consumers. But for months a cloud hung over the company: the threat that the Clinton administration would find Beijing deficient on human rights, sharply raise tariffs and spark a trade war.

Now, the firm can go ahead with investment plans to expand beyond its 50-employee operation in Shanghai. American Pacific can continue to sell $100 quilts that would cost $600 to $1,000 if made in the United States, a price tag most American would consider too expensive.

"We've had the feeling that this was going to be resolved," said Block, who heads production for the family-owned company, referring to China's most-favored-nation status.

With most-favored-nation status, which is extended to most countries, Chinese goods sold in the United States are subject to tariffs averaging less than 10 percent. Over the past 15 years, that's allowed the two countries to become key trading partners, providing a windfall in cheap consumer goods for Americans and making this country China's top export market.

Last year, China exported to the United States $31.53 billion worth of mostly light-industrial products _ such as footwear, textiles, toys and low-end electronics _ an increase of 23 percent from 1992. American companies, meanwhile sold $8.77 billion worth of goods to China, up 18 percent.

Beijing had indicated it would retaliate against any move by Washington to link trade and human rights. That could have shut U.S. companies out of one of the largest and fastest-growing markets. China's economic growth has averaged 10 percent a year over the past decade.

Clinton's decision Thursday to delink trade and human rights issues appears to remove permanently the most serious threat to stable commercial relations between two of the world's biggest economies.

Easing of tensions between the two countries should yield a big expansion of investment and sales opportunities in China for American companies, economists and trade experts say. …