CLINTON CHOOSES TO KEEP CHINA MFN ANOTHER YEAR
Byline: Jim Ostroff / Joyce Barrett
WASHINGTON — Meeting the annual deadline, President Clinton said Wednesday he will renew regular trade relations with China for another year.
It’s a decision that means apparel and textile imports from one of the U.S.’s most important foreign suppliers almost certainly will continue without major impediments.
However, getting Congress to back the move may prove more contentious than usual in the wake of allegations that Clinton inappropriately approved the transfer of defense technology to Beijing in exchange for campaign contributions from a U.S. aerospace firm.
Congress also is investigating charges that Clinton’s 1996 campaign team accepted large amounts of money from Chinese government agents, which, if proven, is illegal.
Many trade and policy analysts here have said that after all the arguments are heard, it is unlikely that Congress would revoke China’s trade status, given the great dependence on its manufacturers for relatively inexpensive consumer goods imports, which have helped to temper inflation here.
China was the U.S.’s second-leading source of imported apparel and textiles during 1997, shipping about 2.1 billion square meters of these products here.
The normal trade status, known as most-favored-nation, is granted to virtually all of the U.S.’s trading partners and allows those countries to ship goods here at relatively low duty rates.
Without this designation, nations such as Vietnam are limited by high duty rates — often exceeding 50 percent — on the goods they can ship here.
Still, Clinton’s Wednesday announcement set off a volley of reactions on Capitol Hill, giving a foretaste of the battle and oratory to come.
House Majority Leader Dick Armey (R., Tex.), a past supporter of MFN, told reporters that the House vote on China’s trade status should have been easier this year.
“But the President isn’t making it easy,” Armey said. “It will be a tough vote.”
Armey predicted the House will consider a resolution to deny MFN, as it has since the Tiananmen Square massacre in 1989, by late July.
Armey also warned Clinton that he should “go to work and talk to Democrats and Republicans about the benefits of MFN” to insure defeat of the denial resolution. “People who believe in freedom of commerce should not be casual about this vote,” he said.
China’s MFN does not require Congressional approval, but Congress has 60 days to reject the President’s decision. If it were to do so, the President could veto this move, and then it would take a two-thirds vote in each house to override Clinton’s veto.
The President, who was flanked by Secretary of State Madeline Albright during a Rose Garden appearance, asserted that permitting MFN to lapse would amount to rupturing economic ties with China and strategic ones, too, “at a time when our cooperation for world peace and security” is being tested by nuclear brinkmanship between India and Pakistan.
Albright was slated to depart immediately from the White House for five-nation talks in Geneva aimed at reducing nuclear tensions in South Asia.
Clinton said continued economic engagement with China has resulted in an improvement of its human rights record, adding that United States exports to that nation have tripled during the last decade and now support approximately 170,000 American jobs.
“Just as important, trade is a force for change in China, exposing China to our ideas and our ideals and integrating China into the global economy,” he said.
Clinton is slated to make a state visit to China at the end of June and early July, the first president to travel there since Tiananmen Square.
Congressional Republicans have urged the President to cancel this trip in light of questions about campaign financing and illegal technology transfer to China, but he has rebuffed their calls.
Meanwhile, House Speaker Newt Gingrich (R., Ga.); Rep. Bill Archer (R., Tex.), chairman of the House Ways and Means Committee, and Rep. Phil Crane (R., Ill.), chairman of the House Trade Subcommittee, said in a letter to the President that the three planned to work with him in a bipartisan manner to preserve MFN.
At the same time, Rep. John Boehner (R., Ohio), fourth in line in House leadership, said in a statement that Clinton had “endangered” China’s trade benefits by the technology transfer. “To ensure that we can continue our free trade approach, the President must come clean right away and offer complete, forthright answers to these serious questions,” Boehner said.
The top Democrat in the House, Rep. Richard Gephardt (D., Mo.), said in a statement that he opposed Clinton’s decision because the Chinese government is repressive and tyrannical.
Gephardt noted the Chinese have “trampled the rights of Tibetans” and have denied Chinese citizens religious freedom and fundamental human rights.
“Human rights is a principle that cannot be allowed to fall prey to politics,” Gephardt said. “America must stand for more than money.”
On the other hand, Rep. Robert Matsui (D., Calif.), top Democrat on the House Trade Subcommittee, praised Clinton’s decision and said that to deny MFN “would be tantamount to declaring a cold war.”