Winners and Losers: China Trade Debate

May 12, 2000 at 12:00 AM EDT

KWAME HOLMAN: Critics of global trade claim it always creates winners and losers. And the people here at the Inman Textile Mill are convinced they will be losers if a U.S. Trade agreement with China goes through. Rob Chapman owns this mill in the tiny town of Enoree, South Carolina. The mill was founded by his great-grandfather in 1902.

ROB CHAPMAN, Mill Owner: We know we are going to lose. We are going to lose jobs.

KWAME HOLMAN: Chapman’s mill produces fabric that goes into everything from furniture upholstery to khaki pants. He and many of his workers say if Congress votes to normalize trade relations with China, the U.S. will be flooded with cheap Chinese fabric imports, making it hard to compete. Many workers here are mill veterans. It’s been 26 years for machine technician Ricky May.

RICKY MAY, Mill employee: How can you trust a Communist country that’s already smuggling billions of dollars of goods into this country already? They talk about equal trade? I mean, ask yourself — they pay these people 25 cents an hour. How can you have equal trade?

KWAME HOLMAN: May’s colleague, Linda Simmons, is a 24-year Inman veteran.

LINDA SIMMONS: I’m a single parent, so I have only one income coming in, and if this place was to close down, I’m sure I’d have to be like everybody else. I’d have to be out there trying to find a job.

Opening access to a huge market

KWAME HOLMAN: But in the complex calculus of international trade, many others believe the China trade deal will make them winners. In and around New York’s Kennedy Airport, there’s much talk that the China agreement will open access to that country’s huge market, and that will add up to more goods shipped, more demand for workers on the loading dock, and more money to be made for cargo companies and middle men.

MARTIN HARTUNG: Signed these endorsements?

KWAME HOLMAN: Martin Hartung is regional vice president of UAC, an air cargo company that ships products across the globe.

MARTIN HARTUNG: So right now I’m thrilled with China. I hope the door opens up and that we can do more trade. The only thing I see happening is more jobs for Americans.

KWAME HOLMAN: The Clinton administration’s top trade negotiator, Charlene Barshefsky, signed the trade agreement last fall in Beijing after protracted negotiations with Chinese officials. The deal would pave the way for China’s entry into the 136-nation World Trade Organization. But for the deal to go through, Congress must vote to normalize trade with China on a permanent basis. Barshefsky was on Capitol Hill earlier this month urging members to do so.

CHARLENE BARSHEFSKY: This agreement with China will open China’s market, a market that will be the largest single market in the world to the full range of American exports of industrial goods, farm products, and services, to a degree unprecedented in the modern era.

KWAME HOLMAN: Lobbying by business interests for permanent normal trade status for China has been fierce.

ANNOUNCER: With 1.3 billion people, China is the world’s largest marketplace.

Organized labor pushing back

KWAME HOLMAN: Ads like this one from a business coalition have flooded the airwaves in the districts of some of the dozens of undecided members, urging them to vote yes. But organized labor is pushing back just as hard against the China trade deal. Labor leaders have held rallies to whip up support among their traditional Democratic and Republican allies.

JOHN SWEENEY, AFL-CIO: And while we are losing hundreds of thousands of jobs, China is setting new records for violations of human rights and polluting the environment.

KWAME HOLMAN: And like their business counterparts, labor leaders have button-holed key undeclared members of Congress. New York Democrat Gregory Meeks is one of them. In mid-April, he met with a contingent of New York labor leaders, including Dennis Hughes, the head of the state AFL-CIO. Meeks’ Queens New York district includes trade-dependent Kennedy airport.

SPOKESMAN: Come on in…concerns that go back and forth. I don’t know which way yet the column lines up.

KWAME HOLMAN: Hughes argues for a temporary, one-year extension of favored trading status to keep pressure on China to improve its human rights practices and labor standards.

DENIS HUGHES: Do it on a yearly or so renewal and be able to impose and discuss and try to get them to improve the conditions that prevail in China in terms of human rights and other situations.

KWAME HOLMAN: But Martin Hartung says anything short of permanent normal trade status for China is a loser for his and other U.S. companies.

MARTIN HARTUNG: We should open the door. If we don’t, China has already has agreement in place now with over 43 nations countries. If America if America says no, China will open the door for trade with these other countries, and we will lose on this. I will promise Mr. Meeks that if they don’t vote yes, that he can come back to this dock a couple of years from now, or even a year from now, when we lose that China trade, and he can watch the jobs go away.

KWAME HOLMAN: To help navigate the crosscurrents, Meeks spent part of the Easter recess with three other House members on an administration-sponsored fact- finding trip to China. Meeks said he had opportunities to talk to ordinary Chinese people and heard some complaints about human rights violations.

REP. GREGORY MEEKS, (D) New York: Is it substantial enough for me to say at this moment that it, in and of itself, will prevent me from voting for this bill? No, I don’t think so. But there are other issues that still remain that could prevent me from voting for this bill.

Weighing the losses and gains

REP. JIM DeMINT, (R) South Carolina: How are you doing?

MAN: Good to meet you.

KWAME HOLMAN: South Carolina Republican Jim DeMint spent his Easter recess a lot closer to home. But like Meeks, he, too, was trying to make up his mind on the China vote. DeMint represents the Congressional district that is home to Inman Mills in the northwest part of the state.

REP. JIM DeMINT: I’m undecided about it and I want to listen to what people really think.

KWAME HOLMAN: DeMint’s district also is home to Haemonetics, a pharmaceutical company that produces a cutting-edge process for blood collection. The company, located near Union, South Carolina, hopes to do millions of dollars of business in China should the market there open up. 24-year-old Angela Todd is a microbiologist at the plant. She said without Haemonetics she’d have a hard time finding a good job so close to home.

ANGELA TODD, Microbiologist: Well, a lot of people don’t know that Haemonetics really exists here in Union. And then you tell them about the growth potential, and that we have the opportunity, maybe, to have some of our products in China, and that will give us more growth, and we can hire people, and that will help Union grow.

KWAME HOLMAN: A 60-minute drive up the road, past the farms where cattlemen hope China trade will create more demand for their beef, the urban city of Greenville is thriving. Brew pubs, coffee houses, and chic bistros line the streets. Unemployment is a staggeringly low 1.7%. Much of this prosperity is being driven by trade-dependent international companies that line the local interstate. The jewel in the economic crown here is the BMW plant, the only one in the United States. It employs 3,000, including Spokesman Robert Hitt.

ROBERT HITT: Within about a 50-mile radius of the BMW plant, here in the upstate, there are 273 international companies flying 17 different national flags. It has been a place that international companies have found a ready work force. China is an important market for companies, such as BMW, and I think ultimately, it will be an important market for many of the companies in South Carolina that export around the world.

KWAME HOLMAN: Such as the general electric plant in Greenville that produces massive gas-driven turbines for power plants. It is the largest such plant in the world, and plant officials say China with its growing need for power represents a fertile market. Congressman DeMint says he’s concerned about human rights violations in China. But he concedes that after listening to many of his constituents, he was leaning in favor of the deal. He talked to us about the China trade agreement during a break in his tour of the plant. Behind him was a 100,000 pound turbine headed for Taiwan it sells for $30 million.

REP. JIM DeMINT: Well, I am real concerned, as many Americans are, about China as a whole, about their products flooding our markets, and taking our jobs, but the agreement we’re working on now is not so when approached this, I was skeptical of expanding any trade relationship with them. But the agreement we’re working on now is not about more T-shirts that say made in China in America. It’s about gas turbines that say “made in U.S.A., sold in China.”

KWAME HOLMAN: But at Inman Mills, Rob Chapman is unconvinced. He says those who favor the China trade deal are willing to sacrifice his company.

ROB CHAPMAN: Sure, they do want to trade us off. They’re willing to trade us off now. And that’s… that’s the battle that we’re fighting, because we can compete anywhere in the world with the technology that we have and the people that we have working for us. But they’re willing to trade us off and we’re going to fight it ’til… ‘Til the end.

KWAME HOLMAN: Located in the shadow of the New York City skyline, Gregory Meek’s mostly African American district is in sharp contrast to South Carolina.

REP. GREGORY MEEKS: It’s a largely middle-class community, where we had at the time of segregation, of course all the ball players, Count Basie, and Billie Holiday, and James Brown. They all had homes here. And so it’s largely, or mostly, a home-ownership community that is looking to continue to develop its commercial infrastructure. Yes, this is a district I’m very proud of.

KWAME HOLMAN: While Meeks said while he still was weighing the potential job losses and gains in the China trade equation, he’s convinced those American business leaders who favor the deal should be willing do more in American communities like his Congressional district.

REP. GREGORY MEEKS: I’m asking for engagement, not only in my district, but throughout the United States of America. We need to make sure that the same kind of investment and creation of jobs that they are looking to do, that also happens in America.

KWAME HOLMAN: The workers and managers in this part of New York, and their counterparts in South Carolina, will be keeping a close eye on Washington. The House is scheduled to vote on permanent trade relations with China during the week of May 22, with neither side yet assured of victory. The Senate will vote soon after, but passage there is almost a certainty.