Clinton Expected to Renew China’s Trade Privileges : Commerce: A commission to monitor the nation’s human rights is reportedly planned. Limited sanctions on Chinese guns and ammunition are possible.

President Clinton is expected to announce today that he will renew China’s trade privileges, but he may impose extremely limited sanctions on Chinese-made guns and ammunition, according to sources who were briefed on the White House decision.

The sources said Wednesday that the Clinton Administration also plans to set up a new commission to examine human rights abuses in China. The commission reportedly would be headed by former President Jimmy Carter, who established diplomatic relations with the Beijing regime in 1979 while he was in the White House.

The commission would be designed as a replacement for the approach that Clinton proposed last year but will now abandon: using trade as leverage to improve human rights in China. In recent days, human rights groups have denounced the idea of a human rights commission for China as a meaningless exercise.

“It would have no authority, no clout and no teeth,” said Mike Jendrzejczyk, Washington director of Human Rights Watch (Asia).

The Administration is facing a deadline of June 3 to decide whether to renew China’s most-favored-nation trade benefits, which permit Chinese goods to be sold in this country under the same low tariffs enjoyed by virtually all other countries.

Last year, Clinton suggested that China should make “overall significant progress” on human rights if it wanted renewal of these benefits for next year.

The President’s decision to renew the trade benefits would stand unless both houses of Congress passed a resolution to revoke it.

As Clinton prepared to announce his decision on future policy toward China, the White House struggled throughout Wednesday to win the critical support of Senate Majority Leader George J. Mitchell (D-Me.), the principal architect of the policy of linking trade benefits to human rights.

In the last few days, the main question was not whether Clinton would renew China’s overall trade benefits, since all sides have agreed for weeks that he would do so. Rather, the issue was whether he would impose sanctions on Chinese imports in response to rights abuses.

Administration officials hope to avoid the embarrassment of a split with Mitchell, who has urged the White House to impose some significant sanctions on Chinese products.

The White House was considering limited economic sanctions on Chinese weapons, or no penalties at all. But Mitchell was pressing for broader, more significant penalties on all Chinese products made by the People’s Liberation Army or by defense-related companies.

Not only is Mitchell the Senate majority leader, he has also done more than anyone to create the China issue that was used for years by congressional Democrats against former President George Bush.

In the years after China’s bloody 1989 crackdown on pro-democracy demonstrations, he pressed for legislation attaching conditions to the renewal of China’s trade benefits.

Eventually, Clinton embraced Mitchell’s approach during the 1992 campaign, when he accused Bush of “coddling dictators” in Beijing and criticized Bush for vetoing legislation on the issue that Mitchell had sponsored.

Now, after a year in the White House, Clinton is backing away from Mitchell’s policy.

Administration officials said he plans to drop the presidential executive order he issued last year attaching a series of human rights conditions to the renewal of China’s most-favored trade status.

By imposing penalties exclusively on Chinese-made guns and ammunition, the Administration would, in effect, convert the China trade issue into a gun-control measure.

Mitchell has objected, saying that the penalties on Chinese-made guns and ammunition do not go far enough. China exports more than $31 billion in products to the United States, and the guns and ammunition make up only a tiny share of these sales.

The Administration has been under intense pressure from the U.S. business community to renew China’s trade benefits.

U.S. firms fear that if the benefits are revoked, China will retaliate against U.S. companies and deal instead only with their European and Asian competitors.

The executive order that Clinton issued last year put the Administration into an awkward position.

Officials believed at the time that the human rights conditions they imposed were so reasonable and limited that China would be willing and able to meet them.

Under the 1993 order, China was required to open the way for emigration of the families of some dissidents and to take action to curb the export of goods made with prison labor.

In addition, China was supposed to make “overall significant progress” on releasing dissidents from prison, on stopping the jamming of Voice of America broadcasts and on preserving Tibet’s cultural heritage.

China has repeatedly denounced imposition of these conditions and has said it will never be pressured into changing its domestic policies.