- The Washington Times - Wednesday, March 15, 2000

What will happen if China joins the World Trade Organization (WTO) is a topic of intense speculation now, following President Clinton's move to send his China bill to Congress last Thursday. The president is hoping for speedy passage of the bill, which would grant Permanent Normal Trade Relations (PNTR) to China. (PNTR is what used to be called Most Favored Nation trade status.) Without it, the United States will not be in compliance with WTO rules if and when China joins the organization.

Here's a fairly safe prediction: Passage of the legislation, which will remove the annual congressional vote on trade relations with China mandated since the 1989 Tiananmen Square massacre, will neither be easy nor speedy. Perhaps that is not so bad either. Congress is being asked to give up the most significant tool in its China-policy arsenal, in exchange for a trade deal that is still being held as a close secret, except in its broadest outlines, by both the Chinese and American governments. At the very least, Congress should not be expected to buy a pig in a poke.

The president is asking for a vote in May, but the Republican leadership wants to wait for European negotiators to reach their own agreement with China. Representatives of the European Union are in Beijing this week, working towards that purpose. House Speaker Dennis Hastert reportedly counts 150 Republicans in favor of PNTR now, which means that 68 Democrats would have to join them to reach a majority. Mr. Hastert, however, wants to be assured of 100 Democratic votes, or threatens delaying the bill until July, too close to the general election for comfort.

Meanwhile, Vice President Gore has been all over the map. According to columnist Nat Hentoff, writing on this page Monday, Mr. Gore pledged to the AFL-CIO on Feb. 17 that, as president, he would not sign any trade agreement that goes against organized labor's wishes. This so disturbed the White House that Mr. Gore had to rescind his promise in a letter addressed to the head of the National Association of Manufacturers. Obviously Mr. Gore is not to be trusted on this issue (or a host of others.) Among congressional Democrats only some 50-60 can be counted on to vote with Republicans. House Minority Leader Dick Gephardt opposes PNTR, but is trying to walk a fine line so as not to upset Mr. Gore's election campaign cart. According to the Wall Street Journal he has privately assured business leaders that he will not "break any arms," as an adviser puts it, to make fellow Democrats vote against it. And while business is lining up on one side, a motley coalition of labor and human rights activists is lining up on the other with Teamsters joining friends of Tibet, etc.

Looked at from a Chinese perspective, WTO is not a cut-and-dried issue either. When President Clinton argues that membership will make the "tools of communication cheaper, better and more widely available," in China, as he did last week, he is articulating fears in Beijing as well. "Imagine how much it could change China," he said. Chinese hard-liners have had precisely the same thought.

A case in point was the decision last week in Beijing to relax a set of restrictive high-tech regulations issued by the State Encryption Management Bureau in October. While the rules appeared aimed at the encryption of communications between dissidents and members of the Falun Gong religious movement, who have been organizing protests via the Internet, they also ran afoul of foreign software companies. These would have had to reveal encryption technology woven into many of their products, including Microsoft's Windows 2000, which goes on sale in China March 20. Foreign companies protested and the government relented.

According to Chinese dissident Wei Jingsheng (who opposes trade with China as Munich-like appeasement with a government of thugs), most Chinese communists really used to be against the WTO. "They are afraid that the system cannot withstand the rigors of the free market." Only they have now been silenced. Since 1996, he says, articles critical of WTO have dried up in China's official media. That coincides with Beijing's drive for membership. According to Mr. Wei, the Chinese people were sold the line by former Prime Minister Li Peng that China will be able to find a way around WTO rules (thus avoiding mass unemployment in, for instance, the agricultural sector), or that China will change the WTO from within, leading efforts by Third World nations to fight labor and environmental standards.

Whether the WTO will change China or China change the WTO will be a question of enforcement of trade rules. Beijing has displayed a fine talent for signing international agreements and flouting them. On Monday, China's top trade official stated that China intends to join the WTO no matter what the vote in the U.S. Congress. This would allow China to lower tariffs on trade with Europe, and to enforce retaliation against American companies, should Congress vote down PNTR.

As nifty a maneuver as this is, the U.S. Congress ought not bow to intimidation. The 1999 U.S. trade deficit with China stood at almost $57 billion, and it certainly would not be in China's interest to start a trade war with the United States. From an American perspective, the benefits of opening China's walled-in markets and facilitating the flow of information within China should probably tip the scales on the side of PNTR. However, before Congress sees the fine print of the deal, there ought to be no rush to judgment.

E-mail: bering@washtimes.com

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