WASHINGTON-President Clinton last week said he will renew most-favored-nation trade status for China, kicking off a fierce debate in Congress on the world’s potentially biggest wireless growth market.
“I believe if we were to revoke normal trade status it would cut off our contact with the Chinese people and undermine our influence with the Chinese government,” Clinton told a group of business leaders last Monday.
Clinton reportedly made the announcement two weeks before the June 3 deadline to build support for a “constructive engagement” policy that the president himself admits has failed to curb human rights abuses and religious freedom oppression in China. That policy de-links human rights from trade. Every president since 1980 has renewed China MFN status.
Odds are that, despite the anti-China MFN movement, Clinton will win approval for the trade policy. But it might take a presidential veto to do it.
The president officially will notify Congress June 3 that he is extending MFN status to China, triggering a 90-day period for lawmakers to act on the directive.
Shen Guofang, a Chinese Foreign Ministry spokesman, called Clinton’s decision wise and said MFN status “is the basis for the expansion of Sino-U.S. economic and trade ties, and is in conformity to the fundamental interests of the Chinese and American people.”
At the same time, Shen said the annual debate over MFN policy “is not conducive for the two sides to build long-term, normal and stable trade relations.”
Today, the United States accounts for 30 percent of China’s exports. That translates into a $40 billion trade deficit for the United States and thousands of American jobs.
Motorola Inc., which has a major presence in China, supports extending China MFN status on a permanent basis. Yet, the Christian Science Monitor and The Weekly Standard reported recently that some Motorola shareholders sought a resolution calling attention to human rights abuses in China.
Albert Brashear, a Motorola spokesman, said he knew of no China MFN issues raised by shareholders at the company’s annual meeting.
Lucent Technologies Inc., another leading U.S. wireless manufacturer, also is cultivating a relationship with China.
The Telecommunications Industry Association, which is poised to launch a strong lobbying effort in support of China MFN status on behalf of U.S. telecom vendors, estimates that half of China’s $50 billion telecom market could go toward wireless infrastructure and equipment.
While Clinton’s China MFN initiative is supported by many in Congress and by major U.S. business sectors, like the telecommunications industry, a broad coalition of organized labor, religious groups, human rights advocates and lawmakers across the political spectrum are gaining steam to oppose the administration.
Rep. Bill Paxon (R-N.Y.), House GOP campaign committee chairman, recently withdrew support of China MFN status and, in doing so, became the symbolic leader of a growing number of lawmakers from both political parties who have begun to reconsider support of trade normalization with China.
House Speaker Newt Gingrich (R-Ga.) initially proposed limiting the duration of China MFN status to less than one year, but later threw full support behind the policy after Hong Kong officials warned of problems if China trade privileges are revoked. Hong Kong reverts to Chinese rule on July 1.
House Minority Leader Dick Gephardt (D-Mo.) will oppose extending MFN status to China, a position that combined with his opposition to the balanced budget deal between GOP congressional leaders and the White House further defines his political portfolio in advance of a possible presidential run against Vice President Al Gore in 2000.
Yet, congressional heavyweights like Senate Finance Chairman William Roth (R-Del.) and Sen. Daniel Patrick Moynihan (D-N.Y.), ranking minority panel member, argue the debate is muddled over semantics. They say most-favored-nation trading status does not give China or any other country special treatment. All but six countries have MFN status with the United States, they point out.
Given that, both men and colleagues on the Finance Committee have sponsored legislation to replace the term MFN with “normal trade relations.”
