At long last, Chinese and US negotiators have apparently struck a deal that could lead to China's membership in the WTO. Although China still needs to reach separate access agreements with Europe and its other major trading partners, the US-China pact removes a major stumbling block to China's WTO accession.
There is now a real possibility that China could join in time to participate in the next round of trade talks, expected to be launched in Seattle later this month.
The agreement is a welcome development, but the obvious question is: what took so long?
The recent tension over China's WTO status illustrates the seemingly reckless nature of Clintonian trade policy.
Much of the rocky relations between the US and China could have been avoided if the administration had signed an agreement during Chinese Premier Zhu Rongji's (
At that time, Beijing offered a credible trade-liberalization package that was unprecedented in scope.
The historic chance to subject China to the discipline of the WTO was nearly squandered because the United States -- not China -- caved in to domestic special interests.
To benefit a few politically influential groups -- most notably labor unions and textile and steel manufacturers -- the administration nearly lost the opportunity to open the Chinese market, and eventually succeeded only in striking a bargain that is worse for most Americans and Chinese than the one offered in April.
The administration has consistently demanded that China accept conditions that don't apply to other nations.
On textiles, Washington got Beijing to agree to US quotas through 2009 -- five years longer than is legal for existing WTO members.
To appease steel companies, the US insisted that China endure a 15-year phaseout of its non-market economy status for the purposes of calculating anti-dumping penalties (Australia and the European Union have already upgraded China to market economy status).
The process of calculating anti-dumping penalties against non-market economy firms has been one of the most abuse prone of the generally flawed American anti-dumping regime.
On top of extended NME status, a special safeguard provision against import surges specifically from China was tacked on.
None those special conditions can be justified economically.
China has a legitimate comparative advantage in the production of textiles and some kinds of steel and should be allowed to sell those products under the same rules that govern other nations.
Moreover, US trade law already provides overly generous protection to US producers from so-called dumping and import surges. Subjecting China to extended textile quotas, increased anti-dumping penalties, and additional anti-surge provisions harms not only Chinese producers, but US consumers and import-using industries.
As for market-opening, China has apparently pledged slightly better access than under its April commitments.
Unfortunately, that positive reality is tarred by the US success in keeping its own market more closed.
On balance, Beijing was right to agree to a new deal, but it was ironic that China's communists found themselves pressuring the US to follow the freer-trade path, while administration officials clung doggedly to self-defeating protectionist relics.
On the positive side, admitting China to the WTO should also open the door for Taiwan.
Although Taiwan has unilaterally demonstrated its willingness to embrace freer trade and deserves WTO membership in its own right, the unfortunate political reality is that China's prior admission would make Taipei's membership more palatable for many members.
If China's accession does not go forward in a timely fashion, however, Taiwan's membership should not continue to be held hostage.
Of course, the US Congress could still wreck the deal. Anger at alleged Chinese spying, illegal campaign contributions, and continuing human rights violations could prompt some members to reject a WTO accession agreement out of hand.
Such congressional critics charge that allowing China to enter the WTO would be to reward it for bad behavior.
That would be a major mistake. WTO membership is not a reward; it is a commitment to institute unprecedented reform and economic openness.
To block China from taking such positive steps because it has made mistakes in other areas only ensures that China's policies will remain uniformly unsound. Besides, as despicable as China's behavior may have been, a good part of the blame must fall on the Clinton administration.
After all, can Americans reasonably expect China to refrain from trying to influence US elections if such influence is for sale?
Washington routinely throws dollars at other countries for exactly the same purpose.
Similarly, that China worked to obtain US nuclear secrets is not a shocking revelation. To the contrary, espionage between great powers has always been the norm. Much more troubling is that the administration failed to plug security leaks after they were discovered.
US Congress should also resist the temptation to obstruct trade liberalization in name of improving human rights.
Trade barriers hurt US consumers and businesses, as well as the most economically vulnerable citizens of China, while doing little to change conditions there.
Certainly Washington should refuse to subsidize trade with China -- an activity which unjustly benefits only a handful of US exporters -- but the freedom of Americans to trade with China should not be sacrificed for a policy that is sure to yield only bitterness, not understanding, between the two countries.
In short, although the current deal is late in coming and although Washington should have made additional concessions, it is nevertheless a positive step. Admitting China to the WTO is in the best interest of China, the US and the world.
Aaron Lukas is an analyst at the Cato Institute's Center for Trade Policy Studies in Washington.
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