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PACIFIC PULSE

More-Than-Dollars-Trade With China Fuels The Engine Of Democratic Reform

By Sanford Gottlieb

Date: 04-25-00

The Clinton Administration push to normalize trade with China has drawn vigorous opposition from many usually seen as friends, including some leading Democrats concerned with human rights issues. But the best way to open China to democratic reform, says PNS commentator Sanford Gottlieb, is through the kind of exposure only trade can bring. Gottlieb is author of "Defense Addiction: Can America Kick the Habit?" published by Westview Press.

Like millions of other consumers, my family buys inexpensive, decently-made products from China -- clock radios, clothing, toys and sneakers imported at low tariffs. Now, a new treaty has set the stage for China to reduce its hefty import barriers on American goods and services.

The Clinton administration has negotiated an agreement that would slash those barriers and grant China Permanent Normal Trade Relations (PNTR). This would end the requirement that Congress annually review the trade status of countries with "non-market economies."

The trade agreement would also ease China's entry into the World Trade Organization (WTO), which sets rules for global commerce. Once in the WTO, China would be subject to pressure on trade rules from all 136 member nations.

China's concessions were dramatic: cut tariffs on U.S. industrial products from an average of 24.6 percent to 9.4 percent by 2005; cut agricultural tariffs from 31 percent to 14 percent by 2005; eliminate all tariffs on computers and semiconductors by 2005; open the door to U.S. insurance, banking and professional services, and grant U.S. businesses their own distribution networks inside China.

U.S. businesses and farm interests are lined up in support of this agreement, which promises big profits from the China market.

Why, then, so much opposition in Congress, which must vote on PNTR? A rare coalition of Christian conservatives, the AFL-CIO, human rights advocates and many environmentalists is vehemently against PNTR. House approval is in doubt, largely because Democrats, feeling the heat from labor in an election year, are divided. Minority Leader Dick Gephardt is opposed.

The AFL-CIO, leading the charge against the legislation, asserts that it would cost U.S. jobs and that China has violated previous agreements. The union federation also demands that PNTR be conditioned on labor rights for Chinese workers as a way of narrowing the huge gap in labor costs.

The State Department's 1999 human rights report seems to bolster organized labor's argument. It notes that independent unions are illegal in China and labor activists are being arrested or detained.

Human Rights Watch, too, wants Congress to set conditions China must meet before extending PNTR. These include ratification of two UN human rights treaties, steps to dismantle labor camps and review of the prison sentences of over 2,000 "counterrevolutionaries." The State Department reports that civil liberties have deteriorated during the past year.

China flatly refuses to accept human-rights and other links to the trade agreement.

In the past, economic pressure on authoritarian governments to ease repression has been largely unsuccessful. The Soviet Union, for example, continued to suppress freedom of expression, emigration and independent unions despite years of U.S. pressure. South Africa is an exception, but in that case most of the world community united to tighten the screws. Today, few countries would link human rights to China trade.

Secretary of State Madeleine Albright has a different perspective. Increasing trade with China and bringing it into the WTO, she argues, "should expand the rule of law and hasten the development of a more open society."

Until China started its slow shift toward openness two decades ago, it was the world's most totalitarian country -- "hermit-like and repressive," in the words of Carla Hills, who negotiated the 1992 market access agreement with Beijing during the Bush administration. Today, Hills adds, the Chinese people still cannot criticize the regime but are otherwise much freer.

Although independent unions don't exist, foreign trade and investment have brought changes to China's workplaces. Doug Guthrie, a Chinese-speaking New York University sociologist, spent a year in Shanghai interviewing industrial managers, workers and officials. He found that Chinese firms with formal ties to foreign companies have set up grievances procedures, mediation committees and individual contracts with workers for the first time. They pay their workers significantly more than firms without foreign links.

U.S. trade representative Charlene Barshefsky concludes that, despite disputes in some areas, China has become a far more open market in recent years. She cites the closing of more than 70 factories producing pirated CDs and CD-ROMs as a measure of China's compliance with tough trade agreements.

As for the impact of Chinese imports on U.S. employment, workers in some industries undoubtedly lose their jobs. But even if those goods from China stopped coming in, imports from numerous Third World countries would take their place.

On the other side of the ledger, U.S. jobs supported by exporting goods to China increased from 113,000 to 180,000 between 1992 and 1998 according to government figures.

How should U.S. policy reconcile these interests? Congress should nail down the Chinese trade concessions by granting PNTR. The administration should insist on strict enforcement of trade rules, both bilaterally and in the WTO.

And pressure on China to improve the rights of its citizens should be exerted in human rights forums, the media and face-to-face encounters with Chinese officials -- by private organizations as well as U.S. diplomats.

In the long run, a combination of economic growth and daily exposure to the legal and business practices of the outside world could make trade the engine of democratic reform inside China. It is in the American and Chinese interest to keep that engine humming.

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