Keep China Engaged, for the Good of Everyone

With the international community focusing on the coming return of Hong Kong to China, President Clinton has moved decisively and sensibly to renew the most-favored-nation trading status of Beijing. This would keep the Chinese engaged--politically as well as economically--for another year, a year that promises to be an exceptional one. Clinton’s move, however, comes at the price of alienating an unusual congressional lobbying coalition of Christian conservatives, human rights activists and labor groups opposed to MFN for China.

Last year when the issue came before Congress, it was sharply economic, hinging on U.S. charges of Chinese infringement of American copyrights. This year the congressional opposition is particularly hot because of concerns over the resumption of Chinese rule in Hong Kong and allegations that Beijing sought to influence U.S. electoral politics through illegal campaign donations. Congress has until Aug. 31 to challenge Clinton’s granting of MFN. House Speaker Newt Gingrich has said he will support the president’s action.

Contrary to the appellation, most-favored-nation trade status confers no extraordinary privileges. It amounts to a normal trade relationship with the tariff treatment that Washington grants nearly all of its trading partners. Even Iraq, for instance, has a modified MFN status.

But Clinton is politically vulnerable because of the administration’s past flip-flops on China policy. The administration declared by executive order in 1993 that China must show progress in human rights as a condition for MFN renewal. A year later, it reversed itself and separated human rights and MFN. The shift was heavily influenced by American businesses that lobbied the White House on behalf of Beijing, calling for a tilt toward trade over human rights.

A compelling argument for MFN renewal this year is the Hong Kong reversion. Eliminating MFN would hurt Hong Kong, which handles about 70% of U.S.-China trade. As Clinton pointed out, even critics of China’s Hong Kong takeover policies--such as Martin Lee, leader of Hong Kong’s liberal Democratic Party--support MFN.

U.S.-Sino relations are complex and multifaceted. The two powers must work together on a variety of issues, including chemical weapons, peace on the Korean peninsula, human rights, Chinese weapon sales and, of course, trade. A comfortable passage of MFN this year would help establish an atmosphere for progress.