Milestone but Not ‘End of the Story’

Wednesday’s House vote marks the end of an era in American policy toward China, the death knell for 10 years of congressional threats to limit trade with the world’s most populous nation.

Those efforts began almost accidentally in obscure campus meetings of a handful of Chinese students in America, angered by their government’s Tiananmen Square crackdown of 1989. Over the following decade, the congressional battles over China trade came increasingly to devour the time and energies of this country’s leading corporate titans and labor leaders.

Now the House vote moves the United States into new territory as it deals with China. While removing trade benefits as a legislative issue, the action does not resolve the continuing frictions over human rights, the trade deficit, arms proliferation and the status of Taiwan, all of which have contributed to the yearly congressional brouhahas.

“This is an important milestone. But I don’t think it’s the end of the story,” said Harry Harding, dean of the Elliott School of International Affairs at George Washington University. “I don’t think it’s the end of the economic issue between the United States and China, nor can we confidently predict stable U.S.-China relations in the future.”

In a curious sense, the bluster of congressional debates over China provided a diverting escape valve for underlying tensions--an outlet that was time-consuming but ultimately safe. Members of Congress could threaten a trade cutoff, knowing all the while that it would never happen.

In the future, differences between the United States and China will have to be settled elsewhere, perhaps with results that are less predictable.

Clinton administration officials have begun to worry in recent weeks about the aftermath of congressional approval of permanent normal trade relations.

“One of the big problems we had in 1994 was that the American public got disappointed that China wasn’t changing more quickly,” reflected one senior administration official recently. He was referring to President Clinton’s decision in 1994 to abandon his efforts to link trade with China to improvements in human rights.

The United States first granted China what was then called “most favored nation” trade status in 1980, a year after the Carter administration established diplomatic relations with Beijing.

Like other communist countries, China was subject to a law requiring annual renewal of most-favored benefits. That provision originally was designed to pressure the Soviet Union to permit its Jewish citizens to emigrate.

Throughout the 1980s, Congress routinely renewed China’s trade benefits without much debate. Even in July 1989, a month after Chinese troops and tanks were called into downtown Beijing to end political demonstrations, the benefits were routinely approved. No one thought to question them.

But in early 1990, in a meeting at Harvard University, Chinese students, looking for a way for the United States to pressure China to ease political repression, hit on a new tactic: They persuaded Rep. Nancy Pelosi (D-San Francisco) to press for legislation imposing a series of conditions on the renewal of China’s trade benefits.

“At that time, we were right,” said Pei Minxin, who was then one of the Chinese student leaders and is now a China scholar at the Carnegie Endowment for International Peace.

“If you look at the situation back then, a lot of students were killed, totally unnecessarily. The hard-liners were in charge in China, Li Peng was the premier and for about two or three years China’s reforms were dead in the water.”

Clinton Used Issue in Winning Election

In succeeding years, Chinese students in America disappeared as a force in the congressional debates. But the cause was taken up by congressional Democrats. Senate Majority Leader George J. Mitchell (D-Maine) lent his name and prestige to efforts to impose conditions on renewal of China’s trade benefits.

When President Bush vetoed the Pelosi legislation, Congress failed to override him. The Democrats then turned China trade into an issue that they invoked against Bush. In the 1992 campaign, Bill Clinton attacked Bush for “coddling dictators,” promising that as president he would impose conditions on renewal of China’s trade benefits.

Clinton followed through by issuing an executive order requiring improvements in human rights before any extension of China’s trade benefits in 1994. When China failed to meet those conditions, however, Clinton backed off, renewed China’s trade status anyway and said that he would no longer seek to link trade and human rights.

“We have reached the end of the usefulness of that policy,” Clinton asserted.

In the summer of 1994, Congress acquiesced in Clinton’s turnabout. From that point on, it seemed clear that China’s trade benefits would never be cut off. Nevertheless, the annual votes still were required.

After Clinton’s reversal, the political dynamics changed. The middle ground collapsed. Business-oriented Democrats who earlier had endorsed Clinton’s efforts to impose conditions on China’s trade benefits moved, with the president, to support unconditional renewal.

Meanwhile, labor-oriented Democrats like Pelosi and Democratic Whip David E. Bonior of Michigan, who until then always had voted for conditional renewal of most-favored status and had opposed proposals by Republican conservatives to revoke the trade benefits outright, began to support revocation.

Now it was the Republicans’ turn. Following the GOP takeover of Congress in late 1994, House Speaker Newt Gingrich and other GOP leaders began eyeing China as a possible issue to invoke against the Clinton administration.

The political problem was that the Republicans enjoyed strong support from the business community and did not want to put it in jeopardy by trying to cut off trade with China.

So every year beginning in 1995, the Republican Congress flirted with attempts to cut off China’s trade benefits but never came close to doing it.

It became an annual ritual: Each spring, the Jeremiahs of the business and lobbying communities would warn that this time annual renewal was really in trouble. And each summer, Congress would fume and fuss and renew the benefits.

Republican leaders learned that, if they wanted to challenge Clinton’s China policy, they would have to find some other way to do it, one that did not get them into trouble with U.S. corporations.

And so the Republicans carried out a series of highly public investigations--of China’s role in the 1996 elections, of American satellite sales to China and, more recently, of Chinese espionage. These served to keep China alive as an issue without endangering U.S. trade with that nation.

In 1998, Clinton for the first time broached publicly the idea of making China’s trade benefits permanent.

“I think it would be a good thing if we didn’t have to have this debate in Congress over China’s trade benefits every year,” the president said.

Within a couple of days, U.S. Trade Representative Charlene Barshefsky added a qualification: The United States would be willing to make China’s trade benefits permanent as soon as China made the extensive economic changes necessary for its entry into the World Trade Organization.

“There’s a lot of talk, but China is not yet ready to walk the walk,” Barshefsky quipped.

Meetings Paved Way for Final Agreement

By the spring of 1999, China was ready to walk. Premier Zhu Rongji arrived in Washington with a package of concessions. But Clinton balked. It was not clear whether Congress would approve the deal; Senate Majority Leader Trent Lott (R-Miss.) served notice that he might oppose it.

Finally, last November, Barshefsky and Zhu concluded a detailed WTO agreement. American companies would not get the full benefits, however, until Congress agreed to make China’s trade benefits permanent.

On Wednesday, Congress went along, doing what it had done repeatedly over the last decade: It voted to approve China’s trade benefits in the United States--this time not just for another year but forever.