Clinton Renews Favorable Trading Status for China

President Clinton renewed China’s favorable trade status Monday, touching off a noisy debate on Capitol Hill about China’s policies, even though expectations are low that trade could be used this year to bludgeon Beijing’s leadership into changing its behavior.

Administration officials had made no secret of Clinton’s intention to extend China’s most-favored-nation trade status, so the announcement came as no surprise.

With the likely Republican presidential candidate, Sen. Bob Dole (R-Kan.), also on record in favor of unconditional renewal, MFN status almost certainly will survive any congressional attempt to scuttle it in protest of China’s economic, defense and human rights policies. An ad hoc coalition of anti-Communist, anti-abortion, protectionist, labor and human rights groups nevertheless vowed a vigorous campaign against the action.

In announcing his decision, Clinton said renewal is necessary if the United States hopes to exert any influence on Chinese policy. He said that the action is not intended to reward China.

“MFN renewal is not a referendum on all China’s policies,” Clinton said. “It is a vote for America’s interests.

“Revoking MFN and, in effect, severing our economic ties to China would drive us back into a period of mutual isolation and recrimination that would harm America’s interests, not advance them,” he said.

In the lexicon of international trade, MFN means that a country enjoys the same low tariffs as “the most favored nation.” Nearly all countries qualify. The United States has MFN agreements with all nations except Afghanistan, Cambodia, Cuba, Laos, Libya, North Korea, Vietnam and Yugoslavia. Iran and Iraq have MFN status, despite other U.S. efforts to isolate their regimes.

Congress now has 60 days to consider legislation blocking the renewal. But if lawmakers approved such a bill, Clinton certainly would veto it, meaning more than a two-thirds majority in both chambers would be required to revoke or attach conditions to China’s trade status. No one expects that many lawmakers to repudiate the presidential nominees of both major parties.

However, Dole said in a statement Monday that Clinton had failed to “articulate a coherent policy toward China and how MFN extension fits in with that policy.”

Without backing away from his own support for renewal, Dole said: “President Clinton’s long silence and his history of zigzags on China has put extension of MFN in serious doubt this year.”

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But even though Dole and Clinton bicker over tactics, their agreement on the overall objective still seems to put the bar impossibly high for opponents of extension. Some critics of Beijing are looking for other ways to send a message of disapproval to China--perhaps by imposing restrictions involving human rights and other issues on China’s application for membership in the World Trade Organization, by admitting Taiwan to the trade organization over Chinese opposition or by clamping punitive tariffs on products of companies operated by the Chinese army.

“It requires a two-thirds vote to [override a veto and] change the president’s policy, and that is not in the cards,” said Rep. Christopher Cox (R-Newport Beach).

Cox said that offering Taiwan membership in the World Trade Organization “offers a much better way to confront Beijing in a trade context while avoiding the self-destructiveness” of an outright revocation of China’s MFN status.

Mike Jendrzejczyk of Human Rights Watch/Asia said human rights groups also are ready to shift their focus to the World Trade Organization. He said the groups will demand conditions to keep China out of the agency, which enforces world trade agreements, until Beijing ends its repression and other human rights violations.

The administration has said it will support Chinese membership as soon as Beijing reforms its economy to comply with the trade organization’s standards. The administration does not support linking membership to human rights or anything else that is not directly tied to trade.

Despite the odds against reversing the president’s action, Kevin L. Kearns, president of the U.S. Business and Industrial Council and chairman of a coalition opposed to MFN privileges for China, said his group will tackle renewal directly and will not look for a fallback position.

“China does not belong in the WTO, but some sort of conditionality in terms of WTO is not a substitute for hitting the Chinese where it really hurts, on MFN,” he said.

Proponents of extending China’s trade status also vowed to mount a vigorous argument, even though their victory seemed assured.

“Much of this takes on a kind of foregone quality,” said Bob Kapp of the U.S.-China Business Council. “Yet it is that very foregone quality that gives the debaters the chance to let fly. One of the reasons that it gets so noisy and amazingly flamboyant is that at the end of the day, it is understood that it will not make a difference.”

Since the United States and China established diplomatic relations in 1979, all presidents have supported MFN status for China. During the 1992 election campaign, Clinton accused then-President George Bush of “coddling the Chinese dictators” by extending their favorable trade status. But in office, Clinton concluded that U.S.-China trade relations are too complex to be linked to other issues.