The Contradiction That Isn’t

The United States and China stand at the brink of a trade war over Beijing’s continued infringement of U.S. copyrights. Yet President Clinton announced Monday that he will renew most-favored-nation trade status for China. What appears to be a contradiction here illustrates the complexity of Sino-U.S. relations.

By continuing MFN for China, Washington is doing the right thing, maintaining the U.S. engagement with China despite--and because of--American economic and security concerns. As Clinton put it in disclosing his decision in a speech to the Pacific Basin Economic Council, which promotes trade and investment in Asia, “Our engagement policy means .J.J. using incentives and disincentives alike to advance core American interests.”

Among the disincentives the President referred to are the administration’s proposed sanctions against up to $3 billion in Chinese exports if Beijing does not stop the rampant counterfeiting of U.S. intellectual property such as videos and compact disks.

The administration, however, has refrained from invoking sanctions over Chinese sale of nuclear technology to Pakistan, buying Beijing’s claim that it was not aware of the sale and would prevent such a transaction from happening again.

Even Bob Dole, the presumptive Republican presidential nominee, who criticizes Clinton’s overall China policy as incoherent, supports the extension of MFN for another year.

It is important to keep in mind that contrary to its name, most-favored-nation status does not confer special treatment. It is a normal trading relationship with the ordinary tariff treatment that Washington affords nearly all its trading partners. Although Congress tried to link trade relations to human rights in China, Clinton separated the two elements in 1994. China, however, like any other country engaged in international commerce, has an obligation to obey trade rules. Otherwise it will never achieve its goal--and the benefits--of joining the World Trade Organization.