Report: NY Would Benefit If China Joins WTO

BUFFALO - A report from a protrade lobbying group says New York businesses would benefit greatly if Congress allows China to join the World Trade Organization (WTO).

In the report, "The Impact of China's WTO Accession on New York State," goTRADE New York says that more than $595 million in New

The report says that these shipments could increase dramatically if trade barriers are lowered as a result of China's participation in the rules-based WTO. The China WTO agreement lowers average industrial tariffs from 24.6. percent to 94 percent, and eliminates a host of services barriers - from geographical restrictions to bans on local currency usage.

The report claims that WTO membership for China would help Carrier by reducing that country's tariffs on air conditioners by more than 30 percent.

John M. Mandyck, vice president for government and international relations for Carrier Corp., says that reduced tariffs will help Carrier in China. But, he says, the greater benefit for the company would come when China adopted market-opening measures required by the WTO.

Right now, Mandyck explains, Carrier can only sell across China products that are made in China. But, with WTO, "foreign-owned companies will get greater distribution rights." Then, he says, "Carrier China as an entity would be able to sell the full range of products across all regions of the country."

Mandyck points to compressors and cargo container cooling units as two products made in Syracuse that could find a market in China, if the country is allowed to join the WTO. While not projecting export increases, Mandyck says, WTO membership "clearly opens the market more and that in turn will have a benefit to Carrier Syracuse." In 1999, Mandyck says, some $30 million worth of air conditioning equipment made in Syracuse was sold in China.

Also, the report says China's reduction to zero on tariffs on all semiconductors, computers and equipment, telecommunications equipment, and other informationtechnology products by 2005 would boost exports of many of New York's high technology producers, such as IBM in Norwich.

"China's entry into the WTO will result in more jobs for New York's workers and farmers," said John L. Manzella, executive director of goTRADE New York. "Under the WTO agreement, China will significantly reduce its trade barriers, allowing U.S. companies improved access to its market. And today, China, including Hong Kong, is New York's fifth largest export destination-bigger than Germany or France. Greater access to this market will result in increased exports and revenues for upstate New York, where economic growth has not always kept pace with the rest of the nation," Manzella added.

Last November, the United States reached an agreement with China that cleared the way for its entry into the WTO. Since then, the U.S. Chamber of Commerce and other business groups have been pushing for Congress to pass legislation that would create Permanent Normal Trade Relations status for China. WTO rules require that member nations grant each other unconditional normal trade relations status. Current U.S. law requires that China's status be renewed each year.

The report was prepared by The Trade Partnership for goTRADE New York and The Business Roundtable.

The goTRADE initiative operates in 19 states and 90 congressional districts and is sponsored by the U.S. Business Roundtable, a lobbying association made up of the CEOs of some of America's largest companies.