1. Do you think the U.S. government should consider human rights when granting preferential trading rights to countries? What are the arguments for and against taking such a position?

A. China is frequently cited as a violator of human rights, trade with the U.S. is very important to China, as China views the U.S. as an important market. The U.S. is also an important source of certain products. Thus, the U.S. has some leverage with trade when trying to influence China’s human rights policies. For this policy to have much effect, however, other nations important to China must adopt similar policies. Otherwise China will simply choose to work with other countries, and U.S. consumers and producers may be more negatively impact than the Chinese. Another concern with tying MFN status to human rights is that denying MFN may make the human rights situation worse rather than better. By engaging in trade, the income levels in China will increase, and with greater wealth the people will be able to demand and receive better treatment.

2. Whose interests should be the paramount concern of government trade policy - the interests of producers (businesses and their employees) or those of consumers?

A. The long run interests of consumers should be the primary concern of governments. Unfortunately consumers, each of whom may be negatively impacted by only a few dollars, are less motivated and effective lobbyists than a few producers that have a great deal at stake. While in some instances it could be argued that domestic consumers will be better off if world-class domestic producers are nurtured and allowed to gain first mover advantages in international markets, it is doubtful that the government will be better than international capital markets at "picking winners", and will more likely pick the firms with the greatest political clout. While employees may well lose jobs if