- The Washington Times - Tuesday, March 14, 2000

China is determined to muscle its way into the World Trade Organization even if Congress refuses to normalize trade relations with the Asian giant, China's minister of foreign trade said yesterday.

"If the United States misses this opportunity, it will actually lose the tremendous market of China and will be giving away the opportunity for participating in this market to its competitors," Shi Guangsheng said at a news conference in Beijing.

China has reached separate accords with all but 10 of the 135 WTO members, he said. Once the remaining deals are concluded, it can gain membership if two-thirds of members approve, Mr. Shi pointed out.

The comment was a clear signal that Beijing will seek WTO membership regardless of how Congress votes on granting China permanent normal trading relations (NTR) status.

Mr. Shi's argument mirrors, albeit in considerably tougher terms, a central argument being made by the Clinton administration in favor of giving China permanent NTR. In an effort to prod Congress into supporting the measure, Clinton administration officials, including the president, have argued that China will join the WTO regardless of how Congress votes.

But the argument is a double-edged sword, according to experts on the law and politics of Sino-American relations.

China legally can join the WTO regardless of Congress, they say.

But the United States, as the leading member of the WTO, could use its diplomatic and political power to prevent China's membership a thorny issue that the White House has dodged.

"[M]y guess is that it would be highly unlikely that the United States would stop China," Secretary of Commerce William M. Daley said yesterday.

Mr. Daley cautioned that the Clinton administration has no definitive position on the issue, but noted that U.S. officials "have been advocating China's entry into the WTO now for many, many years."

The administration wants Congress to approve permanent NTR for China this year. That step would make possible China's membership in the WTO under the terms of an agreement the two countries concluded in November in which China agreed to open a wide range of sectors to American companies.

The White House plans to make public the previously confidential agreement this week, an administration official said. Members of Congress have strongly objected to keeping the deal under wraps, saying it makes building support for the agreement difficult.

The key question in the China debate, say NTR supporters, is whether Congress passes permanent status for China so that the United States can benefit from the November deal, not whether the country will enter the WTO.

Legally, WTO rules allow a new member to join based on a two-thirds vote of existing members, according to Andrew Shoyer, a former U.S. government trade lawyer at the Geneva-based WTO.

That vote could happen regardless of what Congress decides, though it is a cumbersome diplomatic procedure that would require a current WTO member to champion China's entry, possibly in the face of American opposition, Mr. Shoyer said.

But the politics of international trade are a different matter. There is little doubt that the world's only superpower could block Chinese membership in the WTO, according to trade experts.

"For major countries, WTO membership is not likely to go ahead if the United States is in opposition," said John Jackson, a professor of international trade law at the Georgetown Law Center.

But the United States likely would pay such a high diplomatic price that the strategy could backfire, trade sources said.

"We have said publicly and repeatedly that we want to see China in the WTO," said Nicholas Lardy, a China expert at the Brookings Institution. "To do otherwise would really seem like sour grapes."

For starters, it would be a massive affront to the Chinese at a time when Chinese Prime Minister Zhu Rongji has staked his political career on economic reform, Mr. Lardy said.

In addition, other WTO members who want China in the organization would strongly oppose American pressure because the United States would be blocking the benefits that they would get if China joined the world trade body.

"The message to them would be 'because Congress will not extend permanent NTR, we want to block China's membership,' " Mr. Shoyer said.

In short, the United States would come under worldwide pressure, not only from China, to acquiesce to Chinese membership.

But because the United States had not granted China permanent NTR, as required under WTO rules, both countries would have to take Sino-American trade relations out from under the WTO by invoking a seldom-used escape clause.

In that case, according to Mr. Shoyer, China would not be covered by the WTO's highly effective enforcement mechanism and would have no incentive or obligation to adhere to the November agreement. The commercial benefit of WTO membership for China to the United States would evaporate.

"The companies of our other trading partners would make out like bandits" in the 1.2 billion-strong Chinese market, Mr. Shoyer said.

That, according to Mr. Shi, would be something the United States would "regret for 20 years, for a generation."

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