Despite the claims of advocates, permanent
normal-trade-relations (NTR) status is only one element of a
meaningful China policy. The changes in U.S. law and review
procedures for China's behavior that are included in the proposal
of Reps. Sander Levin, D-Mich., and Doug Bereuter, R-Neb., are
at least as important to establishing a sound policy toward
China as granting that country permanent NTR.
After what seems like an endless run-up, Congress is finally
moving to pass permanent NTR status for China. This will help
pave the way for China's entry into the World Trade Organization
and end Congress' annual ritual of voting on China's trade status.
The Levin-Bereuter proposal, however, contains a number of
useful provisions.
First, it makes provision for close oversight of China's progress
in implementing its WTO commitments.
Second, it creates legislation to implement the procedure negotiated
by U.S. trade negotiators allowing the United States to impose
special limits on imports from China that disrupt the U.S. market.
Third, it creates a commission to focus ongoing attention on
China's observance of human rights.
Finally, it states the sense of Congress that Taiwan should
be allowed to enter the WTO on the same schedule as China.
The provisions aimed at enforcing the WTO agreement with China
are particularly important. China has an abysmal record of keeping
the trade commitments it has made. Despite some statements made
in the debate by administration officials, China has violated
every recent trade agreement with the United States on topics
from market access to prison labor.
Even the agreement to protect intellectual property, often
held out as a success, has shown poor results. According to
industry estimates, piracy rates in China remain more than 90
percent, and economic losses due to piracy have actually risen
since the most recent effort to enforce the agreement.
WTO membership may bring multilateral pressure to bear on China
to improve its trade performance. But the WTO is also likely
to have considerable difficulty enforcing its rules in a country
without an established rule of law and with an entirely opaque
process of making trade policy.
The only hope of making real progress in forcing China to live
up to its commitments is an ongoing effort on the part of both
the United States and the WTO.
Almost since the day it was negotiated, the administration's
WTO accession agreement with China has been sold to the nation
in large part upon the safeguard that allowed the United States
to restrict imports that disrupt the U.S. market. In concept,
this provision was significant.
Without legislation to implement it, however, the safeguard
would likely mean nothing. The next president might simply ignore
it and, without a petitioning procedure, the affected domestic
industry would have no way of triggering it. Fortunately, after
some apparently heated negotiations, the House Ways and Means
Committee passed legislation to implement this safeguard.
In another important provision, the Levin-Bereuter proposal
creates a commission -- modeled on one used to address similar
concerns in the old Soviet bloc -- to monitor progress in China
on human rights. Both the Congress and the administration would
have a direct role under this formulation.
Finally, the proposal includes a resolution calling for Taiwan
to be admitted to the WTO. Unquestionably, Taiwan is a stronger
candidate for WTO membership than China. To date, however, by
employing intermediaries, China has been able to keep Taiwan
out of the WTO.
Reportedly, Beijing has agreed to Taiwan's membership once
China becomes a member. Given China's poor record of keeping
promises and its obvious antipathy toward Taiwan, the United
States should spare no effort to hold China to its word and
ensure that Taiwan also enters the WTO this year.
Critics will quickly and rightly point to weaknesses in the
Levin-Bereuter proposal.
The enforcement provision is limited by the inability to impose
sanctions inconsistent with the WTO. The safeguard provision
was inappropriately weakened in the legislative drafting process.
A commission is not able to fundamentally alter Beijing's attitudes
on toleration of dissent. Finally, congressional resolutions
on Taiwan and other topics will have limited impact upon the
Beijing Politburo.
Still, there are benefits to binding China -- at least on paper
-- to obeying WTO rules, and these new procedures do ensure continued
focus on the right issues.
With this focus, the president, the Congress and the WTO can
continue to push China down the road to reform. The House, the
Senate, and the administration should all work to ensure that
the Levin-Bereuter proposal is passed along with permanent NTR
and becomes an integral part of U.S. policy toward China.
Without it, permanent NTR would prove a flawed and ultimately
disappointing policy.
Copyright 2000, Journal of Commerce
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