Vote on China Trade Forced Back on Congress’ Agenda

A year ago, when Congress approved the Clinton administration’s request to grant permanent normal trade relations with China, it was supposed to be the last vote on that perennial issue.

Now, to everyone’s surprise, China trade has been forced back on the congressional agenda. Because of delays in China’s effort to join the World Trade Organization, members of Congress this summer will probably have to choose one more time between U.S. business interests and their constituents’ concerns about human rights and religious repression in China.

Several experts said they worry that some incident in the next few months--such as a new government crackdown on the Chinese spiritual movement Falun Gong--could jeopardize congressional renewal of trade benefits.

“Every annual campaign for normal trade relations opens the possibility of derailment,” said Robert Kapp, president of the U.S.-China Business Council.

But failing such an incident, most experts believe the plan will survive another congressional test. Since 1990, every effort on Capitol Hill to cut off these trade privileges has ultimately failed.

Under last year’s action, China won’t get permanent trade benefits in the United States until it formally enters the WTO; until then, China keeps these privileges on a year-to-year basis.

At the time of the vote, that little qualification seemed insignificant. U.S. officials and Congress assumed that China would be a WTO member by now. But the multilateral negotiations in Geneva over China’s entry have run into a series of snags, making it less likely that Beijing can get into the WTO for at least another six months.

As a result, by June 3 President Bush will have to grant China another annual extension of its trade privileges in the U.S.--and Congress will be required to vote once again this summer on whether to go along.

“There are plenty of people on Capitol Hill who were sold on the idea last year that they would never have to vote for this again,” said Nicholas Lardy, a China specialist at the Brookings Institution. “I think many of them will be disappointed.”

The strongest indication that there will have to be another China trade vote came in Beijing on Monday. China’s Business Times reported that Foreign Trade Minister Shi Guangsheng told a recent workshop that China is not expected to complete its accession to the WTO until October or November at the earliest.

“Most of the [American] business community is coming to understand that in the . . . process of accession to WTO, it is looking very doubtful that China can be in the WTO by June 3,” Kapp said.

“I think it is certain there will be another vote,” Lardy said.

China has enjoyed the trade benefits since 1980. They were not challenged in Congress until the year after the 1989 crackdown on the democracy demonstrations that began in Tiananmen Square.

Still, American business representatives admitted in interviews that they’re not happy about the prospect of another vote and another lobbying campaign.

“It is a rather expensive process to have our political system go through a debate and a vote that many thought had been put to bed in the last Congress,” said Calman Cohen, president of the Emergency Coalition for American Trade, which represents a group of U.S. companies.

The main reason for the delay in China’s joining the WTO is China’s continuing effort to get favorable entry terms. Among the unsettled issues are how much China will be able to subsidize agricultural products and how much it will open its services sector, such as the insurance industry, to foreign competition.

In Beijing, some officials and scholars complain that the United States is trying to squeeze too many concessions from China.

“The [Chinese] government has no way to compromise further; they’ve yielded too much already and are under intense pressure, particularly on the agriculture issue,” said Chinese Academy of Social Sciences economist Yang Fan.

Such pleas are winning little sympathy in Congress. In fact, some members from farm states who in the past took the lead in supporting trade with China are now taking a firm stand against additional U.S. concessions in agriculture.

“We recognize that China has a unique problem in the agriculture sector,” said a spokesman for Sen. Max Baucus (D-Mont.). “However, we also recognize it should not be the job of the U.S. farmer to undo the tragic mistakes of 50 years of corrupt Maoist policies.”

In addition to ensuring another congressional debate, the delayed Chinese entry could influence the timing of the start of any new global round of trade negotiations--a round many Western countries, including the United States, hoped to launch in November.

Speaking to a business group in Hong Kong on Monday, WTO Director General-designate Supachai Panitchpakdi said a working text for such a round would have to be completed by July and expressed hope that China’s entry, once expected in the second half of 2000, would not be delayed until the second half of 2001.

“If China is only an observer” at the preparation and launch of a new trade round, “then it can hardly be called a global round,” he said. “Having China join is important.”

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Mann reported in Washington and Marshall in Hong Kong. Times special correspondent Anthony Kuhn in Beijing contributed to this report.