Deny MFN to China? A Most Farcical Notion

Congress, with plenty of help from avaricious Washington lobbyists and a reflexive, witless press corps, is in the midst of a deceptive annual charade.

Each summer, China’s trade privileges--most-favored-nation benefits, as they are commonly called, or normal trade relations to the politically correct--come up for renewal on Capitol Hill. And each summer, a coalition of forces joins together to mislead the American public into thinking that the benefits might really be in jeopardy.

They’re not. By now, the annual congressional renewal of China’s benefits is almost as much a rite of summer as the All-Star Game. Why pretend it is in doubt? Because this charade ultimately serves many interests.

Members of Congress derive campaign contributions--and lobbyists, consultants and trade associations make money--by convincing American businesses that if they don’t fork over huge sums, U.S. firms soon may lose forever the right to trade with China. And news organizations get to purvey a false atmosphere of suspense by suggesting conflict or impending doom.

It’s happening again this year. Amid the recent furor over Chinese espionage, Washington has been abuzz with suggestions that this year, the annual MFN renewal--scheduled for a vote later this month--could be in trouble.

“There’s always been a big fight over China’s trade status,” CNN’s Wolf Blitzer informed viewers last month. “Now that fight is about to get tougher.” (I don’t mean to single out Blitzer, who was merely rehashing what many of the nation’s leading newspapers were reporting.)

Such thinking is based on an assumption that is perhaps understandable but nonetheless wrong: that if Congress is angry at Beijing, it will vote to cut off China’s trade benefits. History shows us that this is not the case. Let’s go to the videotape:

1997: Congress is in an uproar over revelations of China’s efforts to influence American political campaigns. In May, the New York Times reports on its front page that the MFN exercise “threatens to be more contentious than ever this year.”

Result: MFN renewal is assured when the House votes by the convincing tally of 259 to 173 in favor of renewing the benefits.

1998: Congress is up in arms over disclosures that the Clinton administration permitted two U.S. firms to launch satellites in China and help China improve its rocketry.

In June, USA Today reports that Clinton “may face an embarrassing uphill fight or even a defeat on MFN.” Senate Majority Leader Trent Lott (R-Miss.) announces, “I’ve voted for MFN for China in the past. I’m going to take another look at that.”

Result: MFN is extended again, this time by a still-larger margin, 264 to 166. (Lott, a master at creating the illusion of uncertainty to attract corporate support, doesn’t have to vote.)

Even opponents of MFN have become cynical. A couple of years ago, Rep. Nancy Pelosi (D-San Francisco) called the annual MFN renewal process a “full-employment program” for the lawyers and public-relations firms hired to support MFN.

The dirty little secret is that MFN renewal has not been in doubt since 1994. That was the year China called America’s bluff. President Clinton, having promised to cut off China’s trade benefits if it didn’t make improvements in human rights, backed away and renewed the benefits even though China didn’t meet his conditions. Congress went along.

That was the end. From 1990 through 1994, fearing that it might lose its trade benefits, China had regularly released a few prisoners or taken other conciliatory actions on the eve of the congressional vote.

Since then, it hasn’t bothered. China knows that the American business community is strong enough that it can count on annual MFN renewals. In fact, the only real Washington discussion these days about cutting off China’s trade privileges comes in a different context.

Within the Clinton administration, there has been a subterranean debate about what Washington can do to deter China from an unprovoked attack against Taiwan.

Pentagon hawks favor giving Taiwan more defensive weapons, such as missile-defense systems, even if doing so would anger China. State Department doves argue that missile defenses aren’t wise or necessary because the ultimate deterrent is financial: If China invaded Taiwan, they say, the United States would cut off China’s trade and other economic benefits.

I don’t mean to suggest there’s nothing new about the MFN debate this year. There is. If Washington and Beijing reach an agreement for China’s entry to the World Trade Organization, Congress must decide whether to grant China the permanent MFN benefits that would be part of any such deal. That’s a different, serious and untested issue.

But these yearly MFN extensions for China? They’re a joke. Don’t tell me how this year will be different. China’s annual MFN renewals have already been effectively guaranteed. Congress just hasn’t admitted this fact to the American people yet.