Turmoil In China : Crackdown on Dissent : Wilson Urges Trade Penalties on Beijing

Seeking to prod the Bush Administration to take more punitive action against Beijing, California Republican Sen. Pete Wilson said Saturday that he will introduce a congressional resolution advocating that China be stripped of special benefits it receives as a favored U.S. trading partner.

“Moral pressure . . . needs to be abetted by some kind of--not simply rhetorical, but tangible--penalty to them for this kind of brutish repression,” said Wilson, referring to the Chinese government’s violent suppression of pro-democracy demonstrations. “The United States must, in order to exert pressure on our allies, be a moral leader.”

Wilson’s statement, made on Cable News Network’s “Newsmaker Saturday,” drew an immediate backlash from critics of economic sanctions, who said they were surprised that a California lawmaker would support withdrawing China’s most-favored-nation trading status.

“It would be devastating to the United States and particularly devastating to California,” said Paul Freedenberg, a Washington-based trade consultant and former Commerce Department official.

A ‘Big Boon’ to California

“Trade with China has been a big boon to the California economy, especially to the slumping semiconductor industry,” Freedenberg added. “If the Chinese don’t have most-favored-nation status, their costs to export would go up 30% to 40%. And they depend on that foreign exchange to buy U.S. goods.”

Almost all U.S. trading partners have the preferential trade status. It entitles nations to favorable tariff rates for exports to this country.

Freedenberg said that as many as 100,000 jobs on the West Coast could be affected if the trade status were withdrawn. California industries produce a large share of the U.S. high-technology goods sold to China.

Wilson said he will introduce the measure Monday urging President Bush to revoke the preferential status.

An Administration official, who asked not to be identified, said the President would probably reject such a proposal as premature.

Arms Sales Suspended

In the wake of Beijing’s use of military force to crush the pro-democracy protests, the Administration did suspend all U.S. military sales to China.

But Bush has resisted any sanctions that would significantly impede the $14 billion in trade annually between the two countries, arguing that such a move would hurt progressive elements within China’s government as well as the Chinese people.

Administration officials have said that they are considering other possible options, including moving to tighten international restrictions on exports of sensitive technology to China.

However, sentiment in Congress is mounting for some further U.S. punitive action, as the Chinese government continues to arrest and hold trials for people who participated in protests.

Wilson also called on Bush to offer Chinese students in the United States “extended voluntary departure” status, which would permit them to stay in this country indefinitely.

The Administration so far has told Chinese students it would grant extensions of visas due to expire in the near future.

“I think we really ought to go to the other step,” said Wilson.