U.S. backing down on trade with China

May 24, 1994|By Mark Matthews | Mark Matthews,Washington Bureau of The Sun

WASHINGTON -- President Clinton, unable to punish China without seriously damaging U.S. interests, is likely to renew favorable trade status for Beijing even though it has failed to make significant human rights progress, administration officials said yesterday.

The emerging decision amounts to an embarrassing admission by the administration that it could not make its threat against China stick. Faced with U.S. business pressure to maintain trade ties and with an apparent refusal by China to take the trade threat seriously, the administration is now looking for different ways to pressure China on human rights, officials said.

In announcing the renewal of China's most-favored-nation (MFN) trade status, probably with conditions attached, the administration nevertheless is expected to argue that the yearlong U.S. effort to highlight human rights abuses in China should be judged at least a partial success. MFN status grants China the same low tariffs available to leading U.S. trading partners.

One possible middle course mentioned by administration officials is to restrict or halt imports of goods produced by government-owned enterprises or companies owned or subsidized by the Chinese army. But officials acknowledge that such a condition would be difficult, if not impossible, to enforce.

Secretary of State Warren M. Christopher is expected to deliver a report to the president within a week on what progress China has made in human rights since last May. At that time, Mr. Clinton agreed to renew China's most-favored-nation trade status for a year but set a series of human rights improvements as condition for future renewal.

The president, who is expected to make his decision before he leaves for a European trip early next week, met with Mr. Christopher and other key advisers for 45 minutes yesterday morning.

"I would describe him as at this point shaping the decisions that he will recommend to the president," Mr. Christopher's spokesman, Michael McCurry, told reporters at the State Department yesterday. Mr. Christopher, he said, had also made 16 calls to members of Congress.

"I think he believes that more could be done," Mr. McCurry said of China's human-rights progress. He indicated that Mr. Christopher won't try to exaggerate what progress has been made.

The president has come under lobbying pressure from within his own administration to maintain favorable trade terms for China, the world's most rapidly expanding market. Officials in the Agriculture, Commerce and Treasury Departments fear that China might retaliate for a revocation of MFN by launching a trade war that would seriously hurt U.S. exporters and consumers.

Yesterday, Agriculture Secretary Mike Espy bluntly called for renewal of MFN. In a meeting with reporters, he argued that "China represents a very important market" for U.S. farmers.

On Capitol Hill, the House's third-ranking Democrat, Rep. David E. Bonior of Michigan, joined a coalition of 11 human rights groups in urging the president to pull the plug on China's MFN status.

"The United States should not be in the business of licensing torture," Mr. Bonior said.

Besides China's role as a dynamic market for U.S. goods, particularly costly high-tech goods such as telecommunications and aircraft, China is important as a diplomatic partner. Its cooperation is essential in the administration's struggle to get North Korea, a longtime Chinese ally, to halt its nuclear weapons program. As a permanent member of the United Nations Security Council, China could veto sanctions or other moves to punish the isolated Communist regime in Pyongyang.

The president's May 1993 executive order, crafted in consultation with key members of Congress, sets two conditions China must meet for Mr. Christopher to recommend MFN renewal: a halt to exports made with prison labor and an easing of barriers to emigration. Administration officials argue that China has largely complied with these conditions.

The order also demanded that China make "overall, significant progress" in five other human rights areas.

The policy marked a reversal from that of Mr. Clinton's predecessor, George Bush, who refused to exert economic pressure on China even after the outrage that followed the 1979 Tiananmen Square massacre.

But some congressional critics and human rights groups insisted as recently as Wednesday that China was still using prison labor for exports to the U.S. market.

China is widely believed to have done less in some of the areas where the executive order required "significant progress."

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