Reality in the China Trade

May 25, 1994

In the national interest, President Clinton must find a way out of the trap he laid for himself in his executive order a year ago giving China one year to improve human rights in order to retain most favored nation (that is, ordinary) trading relations.

China is the world's emerging superpower. Removing MFN status would mean raising tariffs about 40 percent, accepting retaliation, and nullifying U.S. firms' opportunities in the world's greatest growth market, including oil exploration and construction. The issue is not about isolating China so much as isolating the U.S.

China is a boisterous economy of regions out of control of central direction. But China's central government is paranoid about disorder, having experienced the lunacy of China's Cultural Revolution of the 1960s. Hence the crackdown on dissidents from 1989 -- a crackdown that is unabated despite U.S. censure. China's Premier Li Peng will not leap through hoops for the domestic agenda of President Clinton. This, however, does not lessen the need for the United States to engage China in dialogue, knit it into the world community, encourage free enterprise and free spirits. Exactly the opposite of what a trade war would do.

There is much the U.S. president can say from his bully pulpit about human rights, both for imprisoned heroes of Tiananmen Square and, more cogently, the culturally suppressed people of Tibet. Citizen groups like Human Rights Watch should not muffle their agitation. But pretending the U.S. government is a human rights referee who must be obeyed, or that trade is a favor the U.S. bestows, is a fantasy this nation can no longer afford.

Drawing away from still another example of untenable foreign-policy posturing will be awkward for Mr. Clinton. But he can make the point that under U.S. pressure China has halted exports made with prison labor and has eased barriers to emigration -- the two specific conditions set out in his executive order a year ago. He should reject a proposed half-way measure banning goods made by state-owned enterprises, including those of the People's Liberation Army. As Sun correspondent Robert Benjamin has reported from Beijing, such a move would hurt the U.S. as much or more than China. State firms were the major buyers of $8.8 billion in U.S. export sales to China last year.

It is counter-productive for the U.S. to engage in a gratuitous struggle of wills with a China whose cooperation is needed, for example, in dealing with the North Korean nuclear threat or in stopping its missile sales to South Asia and the Middle East. If trade is to be an issue, let it concern Chinese pirating of U.S. patents and copyrights or opening Chinese markets to U.S. competition.

What President Clinton must come to terms with in his imminent executive order is that he is shaping policy for years to come. The situation is far too important for play-acting about the internal affairs of China, or for grandstanding that ignores real U.S. national interests.

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