China Trade Deal in Peril
The Clinton administration’s failure to launch new global trade talks at this month’s World Trade Organization meeting may well claim another victim--the U.S. trade deal with China--unless the White House can avoid repeating the blunders it made on the run-up to Seattle. First of all, it must lay out a convincing case to Congress that improved trade ties with Beijing will benefit both countries. It must also display a stiffer spine in defending the deal against attacks by single- issue interest groups.
With much fanfare, and years of trying, Washington last month clinched a deal to allow China into the World Trade Organization if it opens up to imports, lowers tariffs and complies with a host of WTO rules. But in order for U.S. companies to take advantage of the accord, Congress first has to grant Beijing a permanent “normal trading” status, known previously as a “most favored nation” clause. Congress has been extending that status to China on a yearly basis, meanwhile scoring Beijing for its human rights violations and other failings. But there is no sentiment in Congress to extend the MFN clause permanently.
The 4-year-old WTO hoped for a boost in Seattle but instead emerged bruised and badly tarnished. It will take a great deal of work--much more than Washington would be willing to do in an election year--to fix the damage and get a new round of trade negotiations underway.
The U.S.-China trade deal is open to the same attacks that the WTO was from groups that see it as a pro-big-business organization sacrificing the environment and social justice at the altar of corporate profits. U.S. trade unions have already put the administration on notice that they consider the China deal unacceptable because it does not contain labor standards. Human rights groups want to see trade linked to personal and political freedoms.
President Clinton will have to demonstrate why people should care whether U.S. banks do business in China or why Quandong toy manufacturers should have access to U.S. markets. Chinese Prime Minister Zhu Rongji called it a “win-win deal.” Clinton will need more ammunition than that to convince the skeptics.
Emboldened by their success in Seattle, the opponents of free trade have already picked the U.S.-China trade deal as their next target. They believe that the WTO will be even harder to influence if China joins.
Clinton became personally involved in the final stages of negotiations with Beijing, a clear sign he wants the deal. He may find it difficult convincing Congress. The deliberations won’t take place until next year, but Clinton needs to go to work now.
