White House Enlists Help to Seal China Trade Pact

A big trade agreement with China is not yet done--but behind the scenes, the Clinton administration is already working overtime to orchestrate support for the deal.

Over the past week, in strategy meetings at the White House, senior administration officials have urged the chief executives of some of America’s largest companies to start mobilizing resources, including money and their workers, in support of China’s membership in the World Trade Organization, according to administration and business sources.

At one session, attended by Treasury Secretary Robert E. Rubin, White House Chief of Staff John Podesta and several other senior officials, the executives were told they should mount a “NAFTA-style campaign” across the United States to persuade Congress to endorse a China deal. That was in reference to the intense, ultimately successful lobbying campaign by U.S. companies in 1993 to win passage of the North American Free Trade Agreement.

“The basic pitch was ‘Don’t sit back and wait for the ink to dry’ [on a China trade deal] because the opponents won’t do that,” said one administration source.

Opposition could come from labor, which views China as an unfair competitor and has been pushing for worker rights provisions in the WTO, and from some in Congress upset at China’s record on human rights and its alleged theft of U.S. nuclear secrets.

The White House efforts show that President Clinton is preparing the way for a major trade deal with Beijing despite his refusal to finalize an agreement during Chinese Premier Zhu Rongji’s visit to Washington earlier this month.

The WTO is the organization that sets the rules for world trade and resolves disputes between countries. To become a member, China would have to reduce its tariffs and other barriers and give foreign companies far greater access to its huge domestic market.

In return, China would obtain broader guarantees of the right to sell its goods overseas. In the United States, China would eventually be entitled as a WTO member to obtain normal trading status on a permanent basis, rather than having to obtain annual renewals of these benefits. However, Congress would first have to pass legislation making China’s trade privileges permanent.

China is the only one of the world’s 10 largest trading countries that is not in the WTO. Many American companies have been eager for the administration to reach a deal bringing Beijing under the rules of the trade organization.

In an interview, U.S. Trade Representative Charlene Barshefsky insisted that it is premature for the administration to focus on winning support for a new trade deal with China or for the permanent trade benefits that would be a consequence of the deal.

“The first concern is to focus on whether we can conclude an agreement,” Barshefsky said. “If there is no agreement, [congressional backing] is a moot question.”

Nevertheless, the administration in recent days has put into motion an extensive public relations effort based on the assumption that there will eventually be such a deal.

Businesses Told to Step Up Support

In addition to the session Tuesday with CEOs from the Business Roundtable, the White House on Thursday called in the Washington representatives of 10 major American companies, including Boeing, Motorola, Aetna, Citigroup, AT&T;, General Electric and Kodak. These business leaders met with officials from the National Economic Council and the White House office of legislative affairs.

“They put us on notice that business has to step up to the plate,” one participant said. “They said they are working quietly with labor to try to avoid an all-out campaign [of opposition to a deal]. . . . They went around the room and asked all the representatives whether their companies would work hard for China’s entry into the WTO. Everyone said they would.”

Administration officials privately admit that they are still stinging from defeats they suffered in Congress on the last major item of trade legislation--”fast-track” bills aimed at strengthening the president’s authority to conclude trade agreements.

Trying to Avoid ‘Fast-Track’ Repeat

In 1997, the administration postponed a vote on fast-track legislation after it appeared to be headed for defeat. Last year, the legislation came to a vote in the House but lost, 243 to 180. Administration officials have complained that one of the reasons the fast-track bills failed was that organized labor worked intensively against the legislation while the business community was lukewarm in its support.

“We want the business support for this [China’s entry into the WTO] to be not like what they did on fast track, which was basically nothing,” observed one administration official.

During the past few days of meetings, White House officials urged business leaders to round up public support for a China trade deal any way they could--through mass-media campaigns, grass-roots efforts and congressional lobbying.

White House officials said they will meet with the businesspeople at least once every other week to coordinate their efforts on behalf of a China-WTO deal.

“They told us every single member of Congress is in play,” said one of those at the White House meetings. “They said this will not be like the annual campaigns to win support for China’s trade benefits.”

Since 1980, China’s trade privileges, which were long known as most-favored-nation benefits, have been renewed every year. In the early 1990s, in the wake of China’s bloody crackdown on demonstrations in and around Tiananmen Square, there were serious efforts in Congress to revoke or restrict these benefits. But since 1994, these trade preferences have not been in jeopardy.

The business leaders were told that Rubin, Barshefsky, Commerce Secretary Bill Daley and Agriculture Secretary Dan Glickman are working hard to get China into the WTO--and that the business community should be too.