DOT To Open Skies Over Great Wall For 1 U.S. Carrier

<B>DOT To Open Skies Over Great Wall For 1 U.S. Carrier</B>

The Great Wall, built over 2,000 years ago, still stands as testimony to the power and scope of successive dynasties in China. Despite its massive breadth, the Wall never completely fulfilled its primary purpose: to shield the Chinese from northern enemies. Hundreds of years after the Mongol Empire breached the Great Wall, different kinds of barriers successfully separate China from the world.

Today protectionist barriers to trade still exist between China and the world's free markets. Inevitably, these walls also are being penetrated.

In May, Congress abolished a major barrier by granting China "permanent normal trading relations" status, previously known as a "most favored nation" clause. This vote allowed U.S. companies and workers to take full advantage of a trade accord reached last November by the Clinton Administration. It allowed China into the World Trade Organization in exchange for numerous concessions, including: the opening of the Chinese market to leading American products and services, a lowering of tariffs and a commitment to comply with WTO rules and enforcement.

Under this agreement, the United States gains access to 1.2 billion consumers in exchange for nothing. The opportunity to reach a market with one-fifth of the world's population means enormous gains for U.S. workers and companies. While global commercial aviation is not covered by WTO negotiations, aviation will benefit from this watershed event and, in turn, act as a fulcrum for vastly increased trading activities between the United States and China.

This year, the U.S. Department of Transportation will award new air service rights to a U.S. airline to serve China. Today, there are only 25 nonstop flights a week between the United States and China, compared with 421 U.S.- Japan flights. None of these nonstop flights originate from key U.S. business hubs in Chicago or New York.

Far too many businesses depend only on Northwest or United as their link to China. This dependence stunts economic growth and keeps business airfares artificially high. Many businesses in small and medium-size communities across the country must make a minimum of two stops in this country before catching a direct flight to China. Such inefficient service greatly limits business opportunities in China.

By awarding new routes from the United States to China, DOT has an historic opportunity to expand and improve service. Ideally, so-called open skies agreements would provide for unfettered air access. But under current trade rules, DOT can name just one new U.S. air carrier to serve the market, and it must choose between a cargo-only airline or a combination airline offering passenger and cargo service.

If DOT awards American Airlines these new China routes, businesses finally would have choices and communities around the country would benefit from lower airfares as DOT's action would inject a new entrant with a vast U.S. network into the China market. This procompetitive impact is precisely why Alfred Kahn, champion of airline deregulation, supports American's application, and likely explains United Airlines' sudden lurch to serve the Chicago-Shanghai market. United has long held the right to do so.

American would be able to provide one-stop service from twice the number of non-West Coast cities than Delta.

The Business Travel Coalition believes American Airlines' proposal for combination passenger/cargo service to China will have the beneficial effects of increasing competition in international travel markets, increasing business and leisure travel to these markets and increasing opportunities for trade.

To build economic momentum and continue down the path of reform, China will require an infusion of foreign capital, technology and expertise. In the next decade, China needs $750 billion worth of power generation, transportation, environmental and telecommunications infrastructure. American companies and workers now are free to provide these goods.

As the Great Wall's history attests, protectionist barriers--no matter what their size--cannot contain the tides of change forever. Congress has demonstrated our nation's commitment to free trade and a level global playing field for U.S. products and services by granting normal trading relations to China.

By clearing the way for China to join the WTO, Congress has made history, enriched America, and unleashed a tide of economic opportunity and change that will continue to erode remaining barriers to freedom in China.

<I>Kevin P. Mitchell is chairman of the Business Travel Coalition in Lafayette Hill, Pa.