The House vote on Wednesday in favor of Permanent Normal Trade Relations (PNTR) with China was widely praised by insurance industry leaders and the heads of companies in other sectors affected by the new trade terms, which will go into effect over the next two to three years.
The Business Coalition for U.S.-China Trade, an umbrella group that spearheaded lobbying efforts on behalf of PNTR, issued a press release in which Boeing’s CEO Phil Condit, Motorola’s CEO Christopher B. Galvin, UPS CEO James Kelly, American Airlines CEO Don Carty, and others took turns praising the House Members who voted in favor of PNTR, and calling its passage a milestone in U.S. economic relations with China.
AIG CEO Maurice Greenberg said, “Today’s vote shows that there is a bipartisan consensus in support of engagement with China. Republicans and Democrats alike recognize that the best way to promote positive change in China is to trade with China. Had we turned our backs on this agreement, it could have seriously set back U.S.-China relations.”
For insurance companies, brokers and agents, who were included in EU negotiations (see previous story), the new rules will mean more licenses, more areas open to commercial activity and increased business opportunities for both Life and Property/Casualty business. Under current provisions wholly owned non-life subsidiaries will be permitted to operate in two years.
Two further steps are necessary to fully implement the U.S. and EU accords with China. First the Senate must also pass PNTR, which is not expected to be a problem. Business leaders are united in favor of the bill, and have expressed the intention to continue working hard for its passage.
Secondly comes China’s actual entry into the World Trade Organization (WTO). This could happen by the end of the year. China would then be required to conduct trade under WTO rules, which require that all member countries be given equal access to one anothers’ markets and adhere to the trade regulations the WTO adopts.
At that point the major changes in trade relations with China should begin to occur, which assumes that China will honor its agreements. For insurers, who are now effectively excluded from 99 percent of the Chinese market, that day can’t come too soon.
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