White House Bows to Pressure, Releases China Trade Accord Document

Faced with mounting complaints about secrecy, the White House on Tuesday made public a key U.S.-Chinese trade accord, a deal central to President Clinton’s bid to grant Beijing permanent normal trading status with the United States.

The document, stamped “unclassified” on most of its pages, provides many details of China’s pledge to throw open its markets to a catalog of U.S. goods and services. The two countries signed the agreement in November.

Advocates of closer U.S.-Chinese trade ties said the document is consistent with the Clinton administration’s previous descriptions of the accord, adding more in the way of highly specific details than jarring surprises. They expressed relief that the White House had removed a veil of mystery that was increasing suspicions about the sensitive accord and putting members of Congress in an awkward position on one of the most emotional issues they will consider this year.

Lawmakers and some individuals with security clearances had been allowed to review the agreement behind closed doors, yet they were prohibited from sharing information about it, and it was off limits to the general public.

“It removes the canard that somehow we were trying to keep things secret,” a U.S. trade official said of the decision to release the accord. “We weren’t.”

The U.S.-Chinese trade deal is a pivotal element in a series of maneuvers related to Beijing’s goal of joining the World Trade Organization later this year.

Until Tuesday, the White House had been keeping the text confidential in an effort to not bias talks related to China’s bid to join the WTO. U.S. officials have said that releasing the fine print might dissuade Beijing from granting even larger concessions to other trading partners, which would ultimately benefit the U.S. In addition, such public disclosure departs from typical WTO protocol for many-sided negotiations.

Clinton administration and Chinese government officials have said that if Congress fails to grant Beijing permanent normal trade status, China will in turn deny the United States the improved access to its markets that it will give the rest of the world when it joins the WTO.

“I’m really pleased to see the text of this made available,” said Rep. David Dreier (R-San Dimas). “This makes the job of explaining the concrete benefits of bringing China into the rules-based trading system a little easier.”

In summaries for the public, the administration already had reported many key provisions of the pact.

China has agreed, for example, to slash its tariffs on industrial imports from the United States to 9.4% in 2005, from an average of 24.6% in 1997. For many U.S. agricultural commodities, China has agreed to scale back tariffs to the 14% range, cutting them by more than half.

The administration also had disclosed that China would more than double the number of major movies it imports annually on a revenue-sharing basis to 20; allow 49% foreign investment in telecommunications services; and increase U.S. rights in such areas as insurance, tourism, engineering and the underwriting of stocks and bonds.

Despite such summaries, however, the White House was under increasing pressure, in Congress and from the media, to eliminate any possibility that the document was different from official descriptions.

On Tuesday, the administration released page after page of columns, grids and tables, laying out the year-by-year tariff phase-downs for a dizzying range of products, from flashbulbs to pingpong balls, swords to grand pianos, feather dusters to “unbleached plain cotton weave.”

While the dominant theme is increasing access and reduced tariffs, the accord also documents China’s continued determination to restrict some key economic sectors to avoid foreign dominance. Foreigners would be allowed to establish joint ventures to repair and maintain aircraft, for example, but “the Chinese side shall hold controlling shares or be in a dominant position in the joint ventures,” the agreement states.

China imposed a similar limit on foreign investment in marine shipping firms, and foreign life insurance providers would be able to own only 50% of a joint venture. By contrast, foreigners would be allowed majority ownership of courier services and travel agencies, although such agencies “are not permitted to engage in the activities of Chinese traveling overseas,” according to the document.

Briefing reporters, a high-level U.S. trade official expressed hope that publicizing the details of the agreement would serve to increase public support for the administration’s struggle to gain congressional approval of the accord.

“When you see it in black and white, and you see the specificity . . . I think it may make some of the skeptics say, ‘There’s quite a bit here,’ ” the official said.

For all the detail, however, not all observers were satisfied. Some of the language is ambiguous, such as a provision that allows foreign providers of medical and dental services to set up shop with Chinese partners “in line with China’s needs.” Details related to the enforcement of China’s pledges were deferred to a separate accord related to China’s joining the WTO.

Scott Nova, director of the Citizens Trade Campaign and an opponent of closer trade ties between the United States and China, expressed disappointment that the accord does not spell out how China would be required to uphold its commitments not to force foreign firms to move their technology to China as a condition of doing business there.

“When you actually read the agreement, it’s the same mushy language that we’ve seen in previous agreements with China,” he said.

Other skeptics said the White House had already waited too long to circulate the document to the general public, which will have much less time to consider the pros and cons than it did with such earlier trade legislation as the North American Free Trade Agreement and the creation of the WTO.

“I’m glad they’ve decided to do so [release the agreement], but it’s a little late,” Sen. Paul Wellstone (D-Minn.) said in a statement. “This is one of the biggest decisions Congress has had to make in years. It shouldn’t be rushed through Congress before the public has had a chance to find out what it’s all about. What’s the hurry?”