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Purchasing Power: The Corporate-White House Alliance to Pass the China Trade Bill Over the Will of the American People

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The battle over legislation to grant China Permanent Normal Trade Relations (PNTR) with the U.S. was perhaps the costliest political fight ever waged on Capitol Hill. The corporate campaign had to overcome the 79% of the U.S. public which opposed enhancing U.S.-China trade terms absent addressing human rights, religious freedom and labor conditions. In a stunning exhibit in the case regarding the corrosive effect of money on the American political system, Congress passed PNT~ over this broad public opposition after an unprecedented corporate
deluge of campaign cash, lobbying and paid advertising.

Public Citizen has found that just the most prominent corporations and business trade associations involved in the fight spent at least $113 .1 million to purchase power with campaign contributions, paid lobbyists and “experts,” advertising and astroturf “grassroots” on PNTR. To put this in perspective, the corporate campaign contributions we were able to find were double those of either the massive corporate NAFTA or health care campaigns. The entire corporate “Harry and Louise” ad campaign against the health care refortn bill in 1993 cost $4 million and
the entire NAFTA advertising campaign cost $8 million. In contrast, labor unions’ serious campaign to defeat PNTR was vastly outspent and other PNTR opponents – chiefly Chinese dissidents, human rights activists, Tibetan activists, environmentalists, consumer organizations,
family farmers and religious groups – had very limited resources.

This stunning corporate purchase of PNTR approval was supplemented and directed by top priority allocation of the full Clinton Administration resources to the effort. With President Clinton desperate to shift focus from his impeachment to his foreign policy legacy, the
Administration made an unprecedented effort on PNTR, overshadowing the resources and zeal dedicated to top Democratic party priorities, such as health care and labor law reform. Given the growing public opposition to its trade policies, the Administration was required to use many times over the NAFT A-level of time and effort by top level officials and the President. The degree to which the White House China War Room coordinated the corporate campaigning was deemed by the Government Accounting Office to violate the federal prohibition on the use of federal funds to exhort outside groups to lobby Congress.

The context into which the PNTR campaign fell also explains the intensity of the corporate White House crusade. For five years, their joint efforts to advance the corporate managed trade agenda had met numerous defeats at the hands a growing citizens’ movement critical of international commercial agreements that benefitted big business at the expense of ordinary people, small businesses and family farms, and the environment. The attempt to expand the North American Free Trade Agreement (NAFTA) by obtaining Fast Track authority was defeated twice, the Multilateral Agreement on Investment was derailed, and the WTO expansion planned for the Seattle Ministerial ground to a halt after a year-long international civil society “WTO: No New Round, Turnaround” campaign. While a PNTR victory would not overcome the political shift realized by the critics’ string of wins, a loss would announce that the corporate managed trade agenda had not only lost its momentum, but that it was dead.