The China trade and an American city

One by one, Mary Mitagorski cuts and stitches her dress samples. And one by one, like the scraps of fabric that fall to the floor, the seamstress measures the cost of US trade with China and other emerging economies in terms of lost co-workers.

"We're down to seven sewers," Mrs. Mitagorski says with a frown.

Imports have shrunk the textile industry of this blue-collar community, where a decade ago 20 women worked beside her in the small dressmaking factory in Wilkes-Barre, Pa.

As Congress weighs whether to permanently grant China trading privileges extended to most other countries - in preparation for Beijing's entry into the World Trade Organization (WTO) - this rugged corner of northeastern Pennsylvania illustrates the mixed blessings of China trade for ordinary Americans.

A few miles from Mitagorski's shop, down winding roads lined with piles of black gob from abandoned coal mines, manager Charles O'Hara sits in a shiny new mall. Surrounded by racks of books and Godiva chocolates, he tells how more trade with China will benefit his company's bottom line - even as it may worsen prospects for workers like Mitagorski.

"We need the opportunity to have trade agreements that allow us to be competitive in any part of the world," says Mr. O'Hara, energy-affairs manager at a nearby Procter & Gamble plant.

Bigger corporate profits from China, where Procter & Gamble already does business worth $850 million a year, "will trickle down to us as shareholders," says O'Hara. The plant, which makes diapers, toilet tissue, and paper towels, is the largest employer in the region, with 2,500 people on the payroll.

O'Hara and Mitagorski are two of thousands of potential winners and losers who have taken sides in a lobbying battle for congressional votes. Across the country, corporate interests promoting China trade are vying with unions, environmentalists, and religious and human rights groups that want to put conditions on US business with China.

Business groups, the Clinton administration, and a majority of Republicans in Congress say the US economy will benefit if Congress permanently extends Beijing "normal trade relations" - something WTO requires members to grant one another. Otherwise, they say, US companies would lose out to European and Asian competitors when China slashes tariffs and opens its market, as it's pledged to do as a WTO member. They are pressing for a vote in May or June.

Boosters also claim that a growing US corporate presence will promote basic liberties in China. "It's in our best interest to expose those 1.3 billion [Chinese] people to a free market, free speech, and let them see how the other half lives," says James Murtha, Pennsylvania field director for goTRADE, a free-trade lobby.

But labor unions and other opponents of permanent normal trade relations (PNTR) - including most House Democrats - predict that many US jobs will vanish as US firms shift production to China and imports grow. And they question whether China will truly open its markets.

Even if China fulfills its promises, they contend that Washington has legal grounds to continue its yearly vote on trade and still gain most - if not all - of the trade privileges China would grant other nations under WTO.

Instead of PNTR, the US should continue its current annual review of China's trade status, they say. That allows for a point of leverage to pressure Beijing to stop violating human rights, opposing trade unions, and polluting the environment.

Polls show that most Americans do not support PNTR for China, nor do they believe more open trade will lead Beijing to curb its human rights abuses.

'Totally conflicted'

Sitting back in a leather-covered chair in his Capitol Hill office suite, Rep. Paul Kanjorski (D) of Pennsylvania, who represents Wilkes-Barre, wrestles with the diverse interests of constituents like Mitagorski and O'Hara, as well as the global political and market implications of expanded China trade.

"I'm totally conflicted," he says. Indeed, while the Senate is expected to approve PNTR for China, passage in the House is uncertain due largely to Democratic wavering. Scores of members like Representative Kanjorski remain undecided on the vote, which they view as more complex and momentous than the annual review of Beijing's trade status.

"If we don't engage China ... it could stifle the American new economy," Kanjorski says. "But," he adds, "I'm very worried about a whole class of workers who could forgo their livelihood without a support system.... The guy in a traditional blue-collar job may pay a disproportionate price. We can't let that happen."

Standing outside an old brick factory building in downtown Wilkes-Barre, Mitagorski represents that vulnerable manufacturing workforce, one already hard hit by successive economic downturns. Once one of the world's leading producers of anthracite coal, this area was jarred by mine shutdowns in the 1930s and '40s, when thousands of miners like Mitagorski's father lost their jobs, and women like Mitagorski's mother went to work in textile trades to support their families.

"I'm a coal-miner's daughter - only I can't sing like that," jokes Mitagorski, a member of the Union of Needletrades, Industrial and Textile Employees.

In the 1980s, domestic recession and an influx of imports began hurting the sewing shops, footwear factories, and other local manufacturing plants. Some 10,000 manufacturing jobs were lost from 1989 to 1998. As work disappeared, the region saw its population continue to decline steadily.

"Our workforce diminished, more and more stuff was done offshore, and the government was doing nothing to stop it," says John Rusak, one of 1,000 former shoe industry workers whose factory closed down in Wilkes-Barre last year.

The scars from economic dislocation, much like the old mines that cut though this hilly region, lead workers like Mitagorski and Rusak to view the China trade deal in apocalyptic terms, as the ultimate blow to decent American jobs and wages.

"We've seen the coal, the dresses, the department stores go down. With WTO, things won't go right for this country," warns Pearl Novak, a retired sewer and union veteran of 50 years. "What will our grandchildren have? They aren't all Einsteins!"

From coal to silicon

Wilkes-Barre business and community leaders disagree. They are placing their hopes on luring high-tech jobs and competing in the new, technology-driven economy - that is expected to benefit from expanded commerce with China.

"The opportunity in terms of earnings and the future is with the new economy and the global economy," says Roger Bishop, human-relations manager at the nearby Mountain Top, Pa., plant of Intersil Corp., a semiconductor maker with business in China. "Our community is transitioning from a skill-based orientation to a knowledge base."

In recent years, the region has had some success using its low-cost advantage to attract more high-tech businesses in fields like information processing, semiconductors, and electronics.

In February, the chambers of commerce for Wilkes-Barre and neighboring Scranton formed a Great Valley Technology Alliance to draw more college-educated professionals and high-paying technology jobs.

Still, Wilkes-Barre remains on the fringes of the US high-tech boom, and is not positioned to make major gains from market openings in China, he says.

Indeed, this creates a dilemma for Kanjorski, whose district has been targeted by the media campaigns of both the AFL-CIO, which opposes PNTR, and the Business Roundtable, a pro-China trade group.

Folding his hands in his lap, the eight-term Democrat says despite the emotional appeals of his union friends, he believes the loss of manufacturing jobs in his district is likely to go on regardless of whether Congress grants China PNTR.

But Kanjorski also knows his district won't be a big winner from China trade, and he resents what he sees as efforts by Congress's Republican majority to "just take care of big business and high-tech industries."

"The easiest vote here is a 'no' vote. It's politically easy, it's what people in the district want," Kanjorski says, although he worries such a vote could foster hostile relations between Washington and Beijing.

While Kanjorski is withholding a final decision, momentum appears to be growing among his Democratic colleagues to block PNTR for China - frustrating the Clinton administration's efforts to garner the 90 to 100 Democratic votes that House GOP leaders say they need to ensure the measure's passage.

House minority whip David Bonior is expected to release today a list of 20 Democrats who recently chose to oppose PNTR, despite their earlier support for annual renewal of China's trade privileges.

Republicans favor move

For their part, the majority of House Republicans will back China PNTR, according to a spokesman for majority whip Tom DeLay (R) of Texas. But a significant minority of GOP members may not. Their top concerns include Chinese strategic threats to the United States, Beijing's saber-rattling at Taiwan, and China's family-planning regime and religious persecution.

"They haven't made the human rights changes they need to make," says undecided Republican Sue Myrick of North Carolina. "They have not followed the rules and usually just laugh in our faces."

Ms. Myrick's district, much like Kanjorski's, is divided on China PNTR along economic lines. The influential banking industry around Charlotte, N.C., - the second-largest banking center in the United States - strongly favors the bill.

But a large group of textile workers, who make up 15 percent of the workforce in the district's western counties, are fighting the bill.

Myrick is also hearing from Christians who oppose PNTR for China on moral grounds.

"Conservative Christian pastors in this state feel it's a travesty for China to get these benefits with what Christians in China have to deal with," says Mike Decker, state field director of the North Carolina Christian Coalition.

While it's too early to predict the outcome for China PNTR, Myrick says so far "it doesn't look like we have the votes to pass it."

(c) Copyright 2000. The Christian Science Publishing Society