Clinton Faces China Trade Issue

THE Clinton administration is about to come face to face with one of America's long-standing dilemmas - how to deal with human-rights violations, trade barriers, and weapons proliferation by China, the world's most populous nation.

President Clinton could impose sanctions on the $25 billion worth of toys, shoes, clothing, and other goods that China sells to the United States anually under most-favored-nation" (MFN) trade status, which carries the lowest tariffs. It is America's main point of leverage.

But using it risks alienating China as an international partner, undermining her blossoming economy, and sabotaging United States exporters who sold $8 billion worth of aircraft, chemicals, wheat, and other goods to the Asian giant last year.

If Mr. Clinton does nothing, hoping prosperity will make China more cooperative and democratic, the US may forfeit its human rights leadership and the chance to halt weapons sales to Syria, Iran, Pakistan, and other nations outside the safeguards of international weapons treaties.

The Clinton administration seems torn - as it has been on Haiti and Bosnia - between preelection campaign pledges to fight strongly for human rights and post-election wishes to avoid risky conflicts and support stability and economic growth, here and abroad.

"The president hopes we will be able to extend MFN this year," says a State Department official. "The president's decision will depend on China's movement in a variety of different areas including human rights, nuclear proliferation, and trade.... We are now engaged in discussions with the Chinese."

Hong Kong Gov. Chris Patten will arrive in Washington next week to ask the US not to levy economic sanctions, which could cost the British colony 70,000 jobs, said a spokesman for the Hong Kong office of the British embassy here. (China-Taiwan meeting, Page 6.)

On the other side of the issue, Tibet's exiled leader, the Dalai Lama, visited Clinton at the White House on Tuesday. During his visit, the Nobel laureate warned that the ongoing migration of millions of ethnic Han Chinese to Tibet foretold "cultural genocide" for his 6 million countrymen. At a Carnegie Endowment luncheon, he appealed for US aid in the form of "economic pressure" to help his country regain its freedom from Chinese occupation.

That message has won widespread support in Congress.

Senate majority leader George Mitchell (D) of Maine and Rep. Nancy Pelosi (D) of California recently introduced legislation that would extend MFN status for the coming year only on the condition that China makes strides in improving human rights, lowering trade barriers, and ending weapons sales to some bellicose states.

The president must request a congressional waiver by June 4 in order to continue China's MFN status.

Former President Bush vetoed bills restricting China's MFN status since the 1989 Tiananmen Sqaure massacre. Although Mr. Bush is now out of office, his policy of friendship with China still has many supporters.

Rep. Lee Hamilton (D) of Indiana, chairman of the House Foreign Relations Committee, recently listed how "China's pursuit of its geopolitical goals have converged with our own" since Richard Nixon first played the "China card" in 1972.

For example, he told the Business Coalition for US-China Trade that China limited Soviet influence in East Asia and Afghanistan; ended support for the Khmer Rouge in the Cambodian peace accord; played "good cop to our bad cop in pressuring North Korea to open up about its nuclear program"; and voted for sanctions on Iraq in the United Nations Security Council.

Representative Hamilton, who prefers "flexible" diplomatic pressure on China instead of the blunt weapon of a congressional MFN bill, warns that embittering US-China relations could lead to insecurity in Southeast Asia; the spread of nuclear weapons; gridlock in the UN; and an end to profitable US sales and investment in "the world's fastest-growing market."

David Lampton, president of the National Committee on US-China Relations, also criticizes the proposed use of MFN sanctions to attack a wide variety of offensive Chinese actions, such as using prison labor to produce products for export, jailing democracy activists, and suppressing Tibetan culture.

"If you try to use global sales to punish half-a-dozen things, it's using a shotgun to do what a bullet can do," he said. "Make the punishment fit the crime. If they ship illegal textiles, punish that category. If it's prison products, punish that category. If it's missile sales, target technology transfer."

Representative Pelosi replies: "A lot of people who have juicy deals with China do not want to do anything. They talk about the loss of face to the Chinese leaders but forget about the loss of face to the people who died in Tiananmen. America needs to make a decision - to decide what it stands for. It would be a cruel hoax if we said that the cold war was about freedom and democracy but it was really about access to cheap labor markets."

Predictably, the administration appears determined to tread a middle course between the two extremes.

"We will seek cooperation with China on a range of issues," but "Americans cannot forget Tiananmen Square," says Winston Lord, who was recently sworn in as assistant secretary of state for East Asian and Pacific affairs.

"The United States therefore should conduct a nuanced policy toward Beijing until a more-humane system emerges," he adds. "Shunning China is not an alternative. We need both to condemn repression and preserve links with progressive forces which are the foundation of our longer- term ties."