Fri, Oct 06, 2000 page12

• Overselling the benefits of WTO for China

  • By Bruce Dickson
  • • 
    • 
    • 

  The US Senate's recent approval of permanent normal trade relations (PNTR) for China came and went without a great deal of suspense or celebration.

  Unlike the earlier vote in the House of Representatives, there was little doubt that the Senate would eventually approve PNTR. The delay had primarily been due to domestic US politics. Senate Republicans wanted to delay this victory for one of President Bill Clinton's most important initiatives in the last year of his administration. They also wanted to hold the vote as close as possible to the November elections to weaken labor's support for the Democrats because organized labor was opposed to PNTR.

  The only real issue had been whether PNTR would be conditional, but amendments linking PNTR to human rights, proliferation and other issues were overwhelmingly defeated. Supporters of the bill did not want to end up with different language from the version passed by the House, which would have required further negotiations and a second vote after Senate and House negotiators reached agreement on final wording.

  With time on the Congressional calendar running out, there would not have been time for another vote before this session of Con-gress concludes. Most of the people in Congress wanted to get the bill done and done this year.

  It would have been remarkable for a Republican Congress not to approve a major trade agreement. US business groups were solidly in favor of PNTR and they made it clear that they were watching how Congressmen voted on this important piece of legislation.

  For Clinton and other Democrats, arguing the benefits of free trade with China was not enough. Congressional and public sentiment toward China has been skeptical, at best, and Clinton felt obliged to defend PNTR on other than pure economic grounds.

  To argue that the main benefit of PNTR is that it would be good for US business must have seemed too crass. Some in the State Department tried to make that case, but were overruled by those who felt the need to defend PNTR on national security grounds.

  Clinton was already subject to criticism that he had not done enough to promote human rights in China, to protect US military secrets from Chinese espionage, to defend Taiwan from Chinese intimidation in general, to putting commercial interests above all else in his China policy. Each of these complaints was overblown, but there was also an element of truth to them. He was vulnerable to accusations that he was not doing enough to uphold American ideals in his China policy.

  So he and other administration officials argued that it was not just commercial interests at stake, but national security as well. Increased trade with China would not only be profitable for US business, it would also bring about changes in China that would reduce the threat to China's neighbors and the US.

  Increased trade and greater integration into the global community will supposedly promote the rule of law, benefit the private sector at the expense of state-owned enterprises, expand civil society, and hasten the arrival of democracy to China. If the "democratic peace" theory is correct, then a democratizing China would cease to be a threat to peace and security in East Asia.

  That is a lot to expect from one piece of legislation. It creates false expectations of a smooth, certain, and rapid transformation in China. If demonstrable progress is not seen soon, then critics of improved relations between the US and China will have more ammunition at their disposal. It is, what's more, unlikely that such progress will be realized soon.

  China's entry into the WTO is sure to bring tremendous pain and suffering within Chinese society as it adjusts to increased competition and the long-delayed reform of its state-owned enterprises. Beijing's challenge will be to hold the country together and prevent sporadic strikes and protests into blossoming into more wide-spread rebellion.

  The threat to China's leaders, at least in the short run, will not come from those demanding progress on political reform and democratization but those seeking protection from economic dislocation.

  It is also misleading to argue that the WTO will have dramatic political consequences because those changes have already been underway in China for most of the past decade. While still imperfect, China has been gradually creating a more institutionalized legal system, the private sector has been expanding rapidly, reform of many state-owned enterprises has been underway for several years, and a wide variety of social and economic groups has already been formed, their numbers continuing to grow despite the state's efforts to regulate them and limit their growth.

  Admitting China into the WTO and granting it PNTR certainly will not hurt progress in these areas, but by themselves will not do the trick. Arguing the political consequences of entry into the WTO is sure to raise alarm among China's leaders: the goal is not just profit for foreign companies, but fundamental change in China's political system. This is not a new goal, of course, but emphasizing it so bluntly may make China's leaders even more wary of cooperating with the US.

  What is next for US-China relations? The PNTR vote may be the last piece of good news in US-China relations for quite some time. With the days of the Clinton administration numbered, no new initiatives are foreseeable, and a new administration may take several more months to gets its people and priorities set. China's entry into the WTO could also create a new conflict between the US and China if China tries to prevent Taiwan's simultaneous entry.

  In recent weeks, China has been proposing language that would see Taiwan admitted as a customs territory of China, not as a separate entity. This language violates an understanding between the US and China that was agreed upon several years ago and would create renewed suspicions that China's position toward Taiwan was hardening beyond belief.

  Many have argued that having China and Taiwan in the WTO together would lead to improved cross-straits relations. But if China sticks to its recent language on Taiwan's status, its entry may not go smoothly and Taiwan's entry may not follow immediately. This would surely sour cross-strait relations, and also complicate China's relations with other countries. One would hope that this was just a trial balloon that will quickly be abandoned under international pressure.

  There is no question that PNTR will be beneficial to both the US and China. But our leaders should be careful not to create elaborate expectations of direct and rapid political change in China. China is changing, with or without the WTO.

  Bruce Dickson is director of the Sigur Center for Asian Studies of the George Washington Univer-sity, Washington.
• Most Popular

  • 1

    Bukele proposes prisoner swap with Maduro

  • 2

    HK, Macau residency rules tightened

  • 3

    Wild’s top line too much for Vegas Golden Knights

  • 4

    China turns on the charm for Taiwan businesses: study

  • 5

    Taipei would welcome return of Honduras as ally if it seeks to recognize Taiwan