Beijing Works Against Its True Interests : Other nations need to help Washington in enforcing fair trade rules

Once again, the United States and China find themselves on the brink of a trade war. Because Beijing failed to make the U.S. deadline to crack down on rampant counterfeiting of a wide range of American products, Washington, rightly, is imposing punitive tariffs on a broad range of Chinese exports adding up to $1 billion. And Beijing is threatening to retaliate. Caught in the cross fire is the very future of the U.S.-Chinese relationship.

There is plenty of time to avoid a calamity. The sanctions aren’t scheduled to take effect until Feb. 26. Indeed, seasoned observers predict that China will pull back from the brink and cut a deal with U.S. Trade Representative Mickey Kantor.

Even if it does, the latest flare-up reflects the continuing difficulty of managing the delicate U.S-China relationship. Though the Clinton Administration had made the pointed decision of separating human-rights concerns from the trade issue when it renewed China’s most-favored nation status, Beijing is still far from the desired cooperative partner, either in human rights, trade or nuclear nonproliferation.

Still, China must be engaged constructively. Alas, the United States has been virtually alone in pressing Beijing to attain world standards of conduct in trade, commerce and human rights. Two years ago, Beijing committed itself to protecting intellectual property rights, but since then it has tolerated widespread piracy of American goods, ranging from movies to computer software. Much of this rip-off manufacturing occurs in Chinese state-owned factories. China has the laws on the books to crack down on counterfeiters but too often turns a blind eye.

With a big emerging market, China has obligations as the world’s third-largest economy. Its intransigence on the enforcement of property rights will not garner much support for Beijing’s membership in the new World Trade Organization. Indeed, if anything, other nations must join Washington in talking sense to Beijing. The Administration has stoutly, even stoically, chosen to challenge Beijing at a time when the failing health of senior leader Deng Xiaoping appears to have China’s leaders jockeying for power and reluctant to appear too conciliatory toward the United States amid rising nationalism within China. Beijing is particularly upset with recent U.S. actions toward Taiwan.

Yet Beijing needs to remind itself that it runs a $30 billion trade surplus with the United States. It cannot afford to lose that business at a time when domestic unemployment is rising and inflation is running at over 20%. This time, American business appears to be backing the President--as it should--in his effort to get China to abide by world trading rules. If more nations would team up with Washington, maybe Beijing will readjust its course, play by the rules and mature into one of the world’s most dynamic economic powers.