Clinton Seeking Way to End China Trade Wrangle

During the past few months, the Clinton Administration has been quietly negotiating with both the Chinese government and Congress to work out a formula for ending years of wrangling over the renewal of China’s trade benefits in this country.

Sources say the negotiations began last winter, when Secretary of State Warren Christopher told China’s ambassador to Washington that he hoped Beijing would take steps to improve the country’s human rights, trade and arms export policies.

Meanwhile, Administration officials have been trying to persuade Senate Majority Leader George J. Mitchell (D-Me.) and Rep. Nancy Pelosi (D-San Francisco) to let the executive branch deal with Beijing, rather than pressing for passage of legislation they have sponsored that would impose conditions on the renewal of China’s trade privileges.

“The Administration is sitting in the middle between us and the Chinese,” said one congressional source.

The Administration’s goal is to come up with a lasting solution that will effectively remove China from the legislative arena. The George Bush Administration took a similar approach to Nicaragua in 1989, when it negotiated a settlement with Congress that ended years of battles between the White House and Capitol Hill.

But with the deadline fast approaching for President Clinton to define his China policy, it is still unclear whether the Administration will succeed. Assistant Secretary of State Winston Lord arrives in Beijing on Monday for hurriedly arranged talks aimed at obtaining enough progress from China to forestall congressional action.

By June 3, the President is required by law to tell Congress whether he favors a renewal of China’s trading benefits in this country, and if so with what conditions. China must get annual approval of its most-favored-nation trade privileges, which allow it to export goods to the United States under the same low tariffs enjoyed by most other nations.

Mitchell and Pelosi have introduced bills, now pending in Congress, that would eventually cut off the trade benefits unless China satisfies conditions, such as letting international human-rights monitors into its prisons, ending dangerous arms sales in the Middle East and halting unfair trade practices.

During his presidential campaign, Clinton denounced Bush for “coddling” China’s leaders. And on June 3, 1992, the last time Bush granted China an unconditional renewal of its trade benefits, Clinton called the White House action “another sad chapter in this Administration’s history of putting America on the wrong side of human rights and democracy.”

If Clinton follows Bush’s example by extending China’s most-favored-nations status without conditions, he will almost certainly be accused of junking his campaign promise.

China has repeatedly insisted on unconditional renewal of its trade benefits. But some recent American visitors to Beijing say Chinese officials have become more practical in their approach.

“They seem to have concluded that, given a Democratic President and a Democratic Congress, conditions are almost certain (to be imposed), and the only question becomes whether they are onerous or whether they could be interpreted by China as unobjectionable,” said Joseph A. Massey, a former U.S. trade negotiator who now teaches at Dartmouth’s Amos Tuck School.

The approach now being explored would involve extending China’s trade benefits conditionally for another year, but imposing the conditions by executive order, rather than congressional action. Before China could get favored status again in 1994, Clinton would have to certify in writing to Congress that Beijing had satisfied the conditions of the executive order.

Such an approach would be more palatable to China, because a law enacted by Congress is harder to change than an executive order of the President. And it would be much easier and less cumbersome to persuade the White House that China has met the required conditions than it would be to satisfy majorities in the House and Senate.

Mitchell and Pelosi have said publicly that it does not matter to them whether the conditions are imposed by legislation or by executive order. They and their aides say they are working closely with the Administration in hopes of obtaining changes in China’s policies.

A Mitchell aide acknowledged that, in a sense, Congress is playing “bad cop” while the Administration plays “good cop” in U.S. dealings with China.

But some experts believe the China bills could be brought to a vote in Congress, even if the White House and the congressional leadership are not seeking such an outcome. “Keeping everyone in line is going to be a problem for the Administration,” said Harry Harding, a China expert at the Brookings Institution.

He said members of Congress might take the “path of least resistance” by voting for legislation to restrict China’s benefits.

Moreover, the Administration faces tricky political and diplomatic problems in deciding how tough the conditions should be.

“If the conditions are too low, Congress says, ‘To heck with you, we’re going to do what we’re going to do,’ ” one congressional staff member said.

Yet if Clinton’s conditions are too tough, the Administration faces two other potential dangers.

One risk is that China might decide that trying to satisfy U.S. demands is not worth the effort, giving up hope of obtaining most-favored-nation status. If that occurred, Washington would lose its main leverage for persuading China to improve its human rights, trade and arms-export practices.

The other danger is that China might meet tougher conditions only part way--and put the Administration next year in the embarrassing position of having to bend the truth to certify that China qualifies for a renewal of favored status.

“If the Administration sets the standards too high for China, Clinton will look pretty foolish next year saying how beautiful China’s clothes are,” one congressional source quipped, referring to the fable of the emperor’s new clothes.

The impending deadline for Clinton has brought a host of visitors to Washington, seeking to influence the President.

Two weeks ago, the Dalai Lama visited the White House and Capitol Hill, urging the United States to adopt language that would require China, if it wants to get renewal of its favored status, to limit the transfer of ethnic (Han) Chinese into Tibet.

Last week, Hong Kong Gov. Chris Patten came to see Clinton to warn of the possible impact that loss of China’s trade benefits would have on the British colony, due to be returned to Chinese sovereignty in 1997.

Some critics say the recent flurry of activity shows that Administration officials have been slow to develop a China policy. “They’re way behind the curve,” said Harding. “They are at the last minute putting their policy together. They’re going to have a significant selling job to do on the Hill.”