WASHINGTON – State officials are predicting that Maryland businesses could more than double their exports to China over the next five years, as the result of a bill that cleared the Senate last week granting permanent normal trade relations.
Analysts said the 1.2 billion-person Chinese market offers explosive opportunities for Maryland firms, whose exports to China are currently valued at $75.3 million a year by the U.S. Department of Commerce. Telecommunications, electronics and agriculture stand to do particularly well, experts say.
But while the prospect is encouraging for most state companies, others see a threat in cheap Chinese goods flowing back into this country and undermining businesses here.
“China will dump even more cheap steel into the U.S. market and further harm the U.S. steel industry,” Sen. Barbara Mikulski, D-Baltimore, said Tuesday on the floor of the Senate.
Sen. Paul Sarbanes, D-Baltimore, who also spoke against the bill last week, said it “may be in China’s interest, but I do not perceive it to be in the interest of the United States.”
Mikulski and Sarbanes both voted against the measure, which passed the Senate by a 83-15 vote Tuesday and was sent to the president, who is expected to sign it.
The bill would end the annual review of whether China should be granted normal trade relations with the United States, opening that country’s markets to businesses here that previously faced stiff tariffs for goods they sold there. The bill also paves the way for China to enter the World Trade Organization.
The Department of Agriculture has said that a WTO agreement, for example, would require that China cut its frozen poultry tariff in half, from 20 to 10 percent, boosting Maryland’s large poultry industry.
Bill Satterfield, the executive director of Delmarva Poultry Industry Inc., said that opening China’s markets could be a boon for all aspects of the poultry industry — from farmers to distribution companies — and that this effect will spill over to the rest of the Maryland economy.
“With more than one billion people that’s an exciting possibility,” he said.
Food products are the second-largest category of exports from Maryland, with 25 percent of the state’s exports, according to the Commerce Department. It said the biggest category of exports from the state is electronics and electric merchandise, which currently account for almost 30 percent of Maryland’s $75.3 million in annual foreign trade.
Jim Hughes, director of the Maryland Office of International Business, said that the telecommunications industry looks to benefit the most from a more open market, but that a stable relationship with China can benefit almost everyone who does business there.
“We’ll see an impact over the next several years, but nothing huge for the next 12 months,” Hughes said.
Peter O’Neill, manager of the trade development group in the Office of International Business, added “there should be broad benefits given China’s lack of technology, (possibilities) in everything from medical devices to software.” But, he said, “it’s not for faint of heart.”
Critics of normal trade relations with the world’s most-populous country say that the benefits of the move do not outweigh the drawbacks, including China’s record of human rights abuses and the threat posed to U.S. businesses by opening markets.
“We cannot lose the American steel industry,” Mikulski said during debate on the bill. “It’s not just a jobs issue, it’s a national security issue. During times of war, we cannot rely on foreign steel.”
A spokesman for Bethlehem Steel, which last week expanded its facility in Sparrows Point, said this week that the company never took an official stance on China trade bill.