Collins endorses China trade relations plan

WASHINGTON – Citing expected specific benefits to the potato, timber and fishing industries in Maine, U.S. Sen. Susan Collins says she’ll back permanent normalized trading relations between the United States and China.

“It’s good for Maine, it’s good for the United States,” she said minutes after giving a floor speech in the Senate about her decision to jump aboard the increasingly large bandwagon of supporters who are backing one of Washington’s hottest acronyms: PNTR (permanent normal trade relations).

Collins’ support should actually mean little to the issue with the disposal Wednesday of a major amendment designed to scuttle the agreement by requiring China to restrict its weapons trade. With that amendment defeated, the majority of the Senate has already followed the House lead and signaled it would support the measure.

“I’m concerned about weapons proliferation, but on balance I think it will benefit the people of Maine and the country more than it will hurt,” Collins said. “It was a difficult decision.”

But for home-state politics, Collins’ decision – and an eventual decision by fellow Maine Republican U.S. Sen. Olympia J. Snowe – are an important component in helping the business community understand what could be the most monumental international decision in a generation.

Collins said the help to Maine will cover many types of businesses, from Pratt & Whitney, which manufactures jet engines in western Maine, to broccoli producers. “There’s a market opening up,” Collins said.

Maine exports to China have already increased dramatically in the 1990s – up by more than 50 percent, with an even greater positive impact on small businesses.

“I’m hopeful that the new administration, whoever is the president, will pursue fair trade relations with China more than the current administration has,” Collins said. Critical in Collins’ decision was understanding that the proposal has what is called an imports surge protection -meaning critical Maine shoe and textile industries can’t be harmed by dumping on the U.S. market. “It seems even our most vulnerable industries will be protected,” she said.

“Many of Maine’s natural resource-based industries that drive the state’s economy will benefit from China’s agreement to lower tariffs and reduce non-tariff barriers to its market,” Collins said. “Thousands of Maine workers involved in the production of products from paper to potatoes will benefit from reduced tariffs under PNTR.”

Heavy lobbying came from the Clinton administration to all fence-sitting Senators.

Collins said she was most influenced by Charlene Barshefsky, the U.S. Trade Representative, who presented “convincing” information that swayed her. Staffers for Collins were split, and presented both pro and con positions in an elaborate “and thick” briefing book that she took to the state during the convention recess.

In an exchange of letters with Barshefsky that Collins made available Thursday, the trade representative said flatly that “Maine’s key export sectors will benefit from reduced tariffs in China, strong intellectual property protection and improved trade rules protecting U.S. industries against unfair trade practices.”

Included in the assessment from Barshefsky was the elimination of tariffs on information technology products, major tariff reductions for paper, wood products, construction equipment, heating equipment, leather products, footwear, and parts.

“U.S. farmers will no longer have to compete with China’s subsidized exports to other markets,” Barshefsky said. “Exporters will benefit from obtaining the right to import and distribute imported products such as fish, fishery products and lobsters in China and from tariff cuts on potatoes, potato products and dairy products.”

Barshefsky and then Collins shot down criticism aired by the Economic Policy Institute that suggested Maine would lose 20,687 jobs by 2010 under PNTR for China because it included the loss of 18,091 jobs in the shoe industry – a market sector that only has 5,800 jobs in the state currently.

“This one discrepancy alone reduces by more than 12,000 the projected number of Maine jobs affected,” Collins said, “an inaccuracy that calls into question the validity of the entire EPI analysis.”

Meanwhile, Barshefsky said, the Chinese market will open up for a wide range of services, and the U.S. is expected to take special steps to make sure the terms of the agreement are enforced.

Snowe remains uncommitted. A spokeswoman said there were no special issues that could be cited at this point as to how she differs on the impact on Maine.

“She’s independent, and she wants to make sure that this is right for Olympia Snowe and this is her decision,” said a spokeswoman.

Collins, along with other members of the Senate, were sent personalized letters from 43 of the nation’s governors, encouraging their support.

Gov. Angus S. King of Maine called the arrangement “in Maine’s, as well as the nation’s, interest.”

“The potential for increasing Maine’s already dynamic export growth – and creating more ad better jobs here at home – will only increase if we can gain greater access to Chinese markets,” King said.

At the bottom of the letter, King scrawled a personal message: “I know this is not easy, but I really believe it is in the country’s long-term best interest.”

“In the end, I agreed,” Collins said.

The measure is expected to be before the Senate within the next week or two.