PNTR FACT SHEET

• The time has come to extend PNTR to China as it nears completion of its WTO accession.
• The United States must grant China permanent and unconditional normal trading relations (PNTR) status to bring home the benefits of China's WTO membership to American farmers, manufacturers, and service providers.
• PNTR is not a vote on China's WTO entry. Failure to grant PNTR will not deny China membership in the WTO. It will only deny the United States the very market access we negotiated, and give the competitive advantage in China to Europe and Japan.

• WHAT IS PNTR?

Permanent NTR (PNTR) describes the unconditional Normal Trade Relations tariff status that members of the World Trade Organization (WTO) accord each other as part of their mutual commitments as WTO members. Frequently called Most Favored Nation tariff status in international law, PNTR refers to the standard or "general" tariff treatment the United States extends to other countries in return for mutually favorable tariff treatment for US exports.

PNTR is neither a special privilege, nor a reward, nor the most favored tariff treatment the United States provides to its trading partners. Over 130 member countries of the WTO enjoy PNTR tariff status with the United States, and provide the same treatment to US exports.

• WHY DO WE NEED TO GRANT CHINA PNTR?

Granting PNTR to China is critical to enabling the United States to enjoy the benefits of China's accession to the World Trade Organization (WTO). Article I of the General Agreement on Tariffs and Trade (GATT) requires that all WTO members provide unconditional MFN (PNTR) treatment to other WTO members by granting each other "any advantage, favor, privilege or immunity" provided to other countries "immediately and unconditionally." This principle is the foundation of the WTO.

• WHY IS ANNUAL NTR NOT ENOUGH?

Annual review of China's trading status would directly violate Article I of the GATT because it would be conditional and discriminatory. Both the Administration and the Congress are on record as unequivocally stating that PNTR, not annual NTR, is required to bring home the benefits of China's accession according to WTO rules.

• WHAT WOULD FAILING TO EXTEND PNTR MEAN?

Failure of the US Congress to grant China PNTR would not prevent China from joining the WTO. Ironically, such an action would only deny Americans access to China's market. Should Congress fail to grant PNTR, when China accedes to the WTO it is likely that the China would invoke its right of "non-application" of WTO benefits to the United States under Article XIII of the WTO. The United States would do the same. Thus, although China would be a member of the WTO, the United States would not treat China as a member. Moreover, under this same article, China would not be required to treat the United States as a member.