Clinton talks up trade ties to China

Stabilizing benefits of admitting Beijing to WTO are stressed

'Significant opportunity'

March 09, 2000|By Jay Hancock | Jay Hancock,SUN NATIONAL STAFF

WASHINGTON -- Arguing that close trade relations with China will promote Chinese democracy and benefit U.S. businesses, President Clinton launched the opening salvo yesterday in what figures to be a tough congressional battle to pave Beijing's way into the World Trade Organization.

In a speech at the Johns Hopkins School for Advanced International Studies, Clinton declared that Congress' vote on whether to permanently extend normal U.S. trade relations to Beijing "represents the most significant opportunity that we have had to create positive change in China since the 1970s, when President Richard M. Nixon first went there."

The speech came as Chinese leaders continued to hurl extraordinary threats at Taiwan, warning of armed intervention if the island democracy fails to move toward unification with the mainland. Beijing regards Taiwan as a rebel province.

Beijing's saber-rattling might have hurt support for the China trade bill in the House of Representatives, where pro-Taiwan forces favor a much harder U.S. stance toward Beijing, analysts said.

In addition, organized labor is deeply opposed to the Clinton proposal, and some skeptical members of Congress also point to Beijing's deplorable human rights record, as documented by the State Department.

Fearing further erosion of support for the bill, business recently has been urging the Clinton administration to accelerate the vote instead of waiting until June, when current legislation would expire.

"It's still very, very close, but the momentum is with those that oppose," said Charles McMillion, chief economist for MBG Information Services, a Washington consulting firm. "That's why they're rushing this up."

Permanent normal trade relations is a status enjoyed by most of America's trading partners. China has long prodded the United States to grant it that same privilege, instead of reviewing its trade status annually, and to support its membership in the WTO.

Yesterday, Clinton portrayed Western commerce as a subtly subversive force, slowly loosening the grip of communism inside China, improving living standards and undermining hard-liners.

"We can work to pull China in the right direction, or we can turn our backs and almost certainly push it in the wrong direction," Clinton said. "The WTO agreement will move China in the right direction."

Briefly acknowledging Beijing's recent threats, the president said the United States "will continue to reject the use of force as a means to resolve the Taiwan question, making absolutely clear that the issues between Beijing and Taiwan must be resolved peacefully and with the assent of the people of Taiwan."

WTO membership for China is a top foreign policy priority for the Clinton administration. China enjoys broad access to U.S. markets, as demonstrated by billions in Chinese imports into America and the resulting huge trade deficit. But China remains largely closed to Western goods and services.

Last fall, U.S. trade representative Charlene Barshefsky negotiated an agreement that would open Chinese markets much more widely to U.S. products and prepare the way for WTO membership for Beijing.

Chinese tariffs on U.S. imports will fall by half or more in five years, Clinton said.

"For the first time, our companies will be able to sell and distribute products in China made by workers here in America without being forced to relocate manufacturing to China," he said.

But the deal depends on Congress' approval of permanent normal trade relations between the two countries.

The measure's opponents in Washington are an amalgam of pro-Taiwan Republicans, protectionist and pro-labor Democrats and people concerned about China's human rights and environmental record.

The congressional fight will be "brutal," said Brink Lindsey, a economic analyst at the Cato Institute in Washington. He said the defeat of the measure might not keep China out of the WTO.

The administration -- not Congress -- will vote on WTO membership. China could join the WTO, open its markets to the rest of the world and remain closed to the United States if Congress rejects the permanent normal trade relations, Lindsey said.

That was a possibility that Clinton played up yesterday.

A vote against the measure "will cost America jobs as our competitors in Europe, Asia and elsewhere capture Chinese markets that we otherwise would have served," he said.

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