The Big Trade-off: Clinton’s Asia Policy Stresses Human Rights <i> and </i> Economics

From human rights in China to trade issues with Japan, the controversy stirred during Secretary of State Warren Christopher’s current Asia trip reflects the persistent tensions between U.S. interests and values-- something that plagues Bill Clinton’s entire foreign policy. The Administration rightly seeks to balance these concerns. But this means making difficult choices and trade-offs.

To its credit, the Clinton Administration has recognized the importance of the dynamic economies of the Asia-Pacific to Clinton’s top domestic priority--economic growth and jobs. Yet, Clinton also wants to promote human rights and democracy.

Ironically, while appreciating Asia’s importance, the Administration’s in-your-face tactics display little grasp of regional dynamics--a defect that may prove harmful to U.S. interests. While the goals of expanding free markets and democracy are related, the former tends to produce the latter, particularly in East Asia. But with Clinton’s policy, there appears no sense of cause and effect: He wants it all--now.

In regard to China, Clinton has found the prose of governing far more troublesome than the poetry (“coddling the butchers of Beijing”) of campaigning. While the Administration has, in recent months, wisely sought to redefine its China policy, its rhetoric has painted Clinton into a corner. A growing number in Congress realize that most-favored-nation trading status is, as the Australian foreign minister said to Christopher last week, “not a privilege, but a normal basis for trade.”

Yet, Clinton’s campaign rhetoric is enshrined in the executive order issued last May, during the annual MFN drama that requires China to meet absolute conditions on immigration and prison-labor exports and achieve “overall significant progress” in five other categories of human-rights issues. Until the recent crackdown on pro-democracy dissidents--related, in part, to the coincidence of Christopher’s arrival and the convening of China’s Parliament--Beijing had begun to take a number of steps that, if continued, would have met minimum U.S. demands. But no Chinese leader will make concessions amid the loud warnings Christopher issued en route to Beijing.

If human rights were the only interest Washington had in China, then putting the entire relationship on the line to express our outrage might be arguable. But beyond our $40-billion trade relationship with one of the world’s most important emerging markets, there is far more at stake than human rights.

The goal of U.S. policy toward China is to see Beijing integrated into the world system as a responsible global power. To put it bluntly, with 22% of the world’s population, a seat on the U.N. Security Council, a nuclear arsenal and perhaps the third-largest economy, if China is not integrated into a post-Cold War system, there will not be a viable international system.

From non-proliferation and North Korea to global environmental issues, the United States has a rich agenda to pursue with China--and human rights is one of several important elements. The Administration recognizes this, and has hoped China would meet its conditions for renewing MFN and then, in essence, Washington would declare victory and delink the issue from human rights. But that strategy is in jeopardy.

Similarly, Christopher’s stop in Japan was also in the “we want it all now” category. Even as a deal was being brokered to give Motorola fair access to Tokyo’s cellular-phone market, Christopher was chiding Japan for failing to meet its commitments. There is no question that Japan’s global surpluses and low proportions of foreign investment and import of manufactured goods are indefensible signs of an economy that must become more open. But as with human rights in China, the question is less about the objective than finding the best way to achieve it.

With Japan, it’s not clear what the United States wants. Clinton’s own Council of Economic Advisers issued a recent report saying that if Japan did everything Washington wanted, the trade deficit might be reduced by only $9 billion--to $50 billion.

But the Administration’s “results-oriented” approach has defined the bilateral trade deficit as the issue. As long as the United States is running large deficits and has relatively low savings and investment rates, we will have trade deficits--particularly with a U.S. consumer-led recovery while Japan is in recession. The problem is long term and structural: Japan needs deregulation, tax cuts, more open markets and political reform to empower consumers. This is precisely the agenda of Prime Minister Morihiro Hosokawa. But Clinton’s approach only increases Hosokawa’s difficulties.

Clinton’s team appears to be in an intellectual time warp, circa 1989. U.S.-Japan policy is marked by a deep distrust--not entirely unearned--of Japan, reflecting the revisionist view of Japan. The revisionists argued that “Japan Inc.” was an unstoppable, impervious economic juggernaut bent on dominating the world economy.

But reality discredited this. Japan is in its third year of recession, its stock market has shrunk in half, its investors lost billions in U.S. real estate and it is in the throes of political change. Yet, it is the revisionist view of Japan that still drives U.S. Japan policy.

The Administration is right to make economics the centerpiece of U.S.-Japanese relations and to demand more responsible Japanese behavior. But the style and substance of its approach are likely to be counterproductive. There is a near-term danger of imperiling the political and security aspects of the relationship. Longer term, there is a risk that bullying tactics amid change in Japan will fuel those who view Japan as part of Asia rather than part of the West--to the detriment of Asian stability.

The irony of the Administration’s Asia policy is that, in its yuppie desire for instant gratification, it is fighting battles it is almost certain to win--if it practiced patience. The consistent pattern in East Asia has been that export-led economic growth produces a large urban middle class that then demands political participation and pluralism.

Thus, inspired by the “people power” revolution in the Philippines, South Korea began to democratize in 1988. Taiwan has undergone a similar process and in Thailand, in 1993, activists armed with cellular phones forced out the generals and restored democratic rule. In a sense, China’s Tian An Men was an effort by new social forces created by economic reform to assert themselves politically. As long as economic reform expands, political reform in China will follow. Beijing’s octogenarians are not immortal.

Clinton’s call for a “New Pacific Community” is right. But it comes just as Asia is coming of age. Asians are trading and investing with each other far more than with America. As U.S. markets diminish, so does U.S. leverage.

Beyond shared interests and shared responsibility, there is a need for mutual respect if a sense of community is to be built. Asians are quick to point out the imperfections in American society--from the murder rate to illiteracy. Unless the United States pursues a more enlightened engagement in the Asia-Pacific, it may find itself increasingly marginalized.