The Inscrutable West
Renewal of China's Most
Favored Nation trading status--the privilege that allows an overseas nation to
sell its goods at the lowest possible level of tariffs in the giant U.S.
market--is an annual struggle. Every year, the president favors renewal. On
each occasion, a significant section of Congress is unconvinced. This pattern
has repeated itself for the past decade, no matter which party controls the
White House or Congress. In every case, the president has prevailed and MFN
status has been awarded for another 12 months.
Although
this year's dispute may be more intense and the final margins closer than last
year's, Congress will not derail China's MFN status unless Beijing commits an
act of monumental folly over the next few weeks. The rules favor the occupant
of the White House. Under U.S. law, the president has until early June to
declare formally his support for MFN renewal. Congress then has a maximum of 90
days to decide whether it wants to reject the presidential preference. Even if
both houses of Congress vote against MFN, the administration can veto the
legislation. In effect, MFN rejection requires not merely a simple majority,
but one of two-thirds in both the House of Representatives and the Senate.
In the past, Congress has come nowhere near even a simple
majority in either chamber. In part, this is because the various pressure
groups hostile to China have known that success was too unlikely to merit their
mobilizing troops. It also reflects the enormous pressure brought to bear by
the U.S. business community, which is aware that placing restrictions on
Chinese trade would lead to swift retaliation from Beijing. Even in the
aftermath of the Tiananmen Square massacre, the power of corporate interest has
always prevailed over other concerns. Clinton can be quietly confident that it
will do so again.
However,
MFN renewal should not be interpreted as a sign that U.S.-China relations have
resumed a more intimate path, or that opponents of the administration's
"constructive engagement" approach are in retreat. In fact, the opposite is
true. Policy toward China remains the most difficult and divisive aspect of
U.S. foreign relations. Successful MFN renewal simply reflects the peculiar
circumstances that affect this element of the China debate. Moreover,
proponents of a closer U.S.-China relationship have been forced to compromise.
Clinton had hoped that Congress would vote to make MFN status a permanent
fixture this year, thus ending this annual, largely symbolic fight. Any such
aspirations were abandoned several months ago.
The administration is engaged now in a
defensive strategy aimed at preserving what it can of the
constructive-engagement ideal until congressional pressure eases. For the
moment, Clinton has largely succeeded in limiting the damage. However, three
factors--which could surface at any time--may derail his ambitions:
Campaign
finance
: The campaign-finance scandals that have tarnished Clinton's
second term could spin out of control. The most politically explosive
accusation is that agents of the Chinese government attempted to influence the
1996 elections in favor of Clinton and the Democrats through covert campaign
contributions, and that administration officials were warned about the practice
but did not act. If either the current FBI investigation or congressional
hearings substantiate these allegations, the White House will have little
option but to distance itself from China. Beijing would, in turn, react
furiously.
Hong Kong
: The
imminent return of the British-administered territory to Chinese rule has
galvanized anti-China activists inside the United States. They will insist,
through legislation and other means, that Beijing's behavior toward Hong Kong
become the yardstick by which Washington determines its level of cooperation
with China. The high profile and emotive power of the Hong Kong issue will make
it very difficult for the administration to ride roughshod over such
demands.
China's WTO
bid
: Beijing is keen to be included in the World Trade Organization
and, subject to certain conditions, the U.S. State Department would like to
facilitate its application. However, a majority in Congress either favors a
much tougher stance toward Beijing or rules out its WTO membership altogether.
The position of those seeking further trade-liberalization concessions from
Beijing has been strengthened by recent increases in China's huge trade surplus
with the United States.
U.S. law
does not require the president to request congressional support before
supporting a WTO bid. However, Clinton would risk legislative revenge if he
tried to pursue the issue in the face of firm majorities against him in
Congress. Beijing, however, believes that if Clinton were to spend political
capital on pushing China's membership in the WTO, he could prevail--as he did
on NAFTA and WTO ratification. Should Clinton decide not to try, Beijing will
react badly to what it will perceive as prevarication. Should he try and then
fail, Beijing will conclude that it is dealing with a weak administration.
Mutual
Misunderstanding
Beijing views the United
States as the one country that can influence China's emergence as a major
global political and economic power in both a positive and a negative
direction. Under Deng Xiaoping, Beijing actively sought to cultivate a good
bilateral relationship. Hard-liners, suspicious of U.S. ideological influence,
asserted themselves in March 1996, when missile tests in the Straits of Taiwan
were timed to intimidate Taiwan's politicians and electorate as the country
held its first direct elections to the presidency. The United States responded
by deploying U.S. naval forces in the region. Since then, the hard-liners have
played a less prominent role. Deng's successors broadly favor cooperation, but
lack the late paramount leader's dominating influence. It is thus very
important to Beijing that relations remain on track until the planned exchange
of formal presidential visits, which could happen as early as next year.
The uncertainty over U.S.
China policy means that this cannot be guaranteed. The conflict in Washington
has its ironies. As a candidate during the 1992 presidential election, Clinton
attacked President Bush for "coddling" the "butchers of Beijing." Republicans
in Congress, by contrast, generally favored constructive engagement with China,
while liberal and protectionist Democrats usually opposed it. The liberal and
protectionist Democrats have stayed in place, but Clinton and many
congressional Republicans have swapped positions. U.S. policy-makers often find
the operation of Chinese politics quite incomprehensible, but Chinese officials
must find the United States equally perplexing. It will be some time before
both sides establish better mutual understanding.
