Allowing Premature China Entry Into W.T.O. Would Be A Nightmare for U.S. Security — As Well As Economic — Interests

(Washington, D.C.): As the Center for Security Policy reported Monday, href=”#N_1_”>⁽¹⁾ President Clinton’s
trip to China is likely to prove a long-term set-back for U.S. interests for a number of reasons,
including: its phony de-targeting agreement; its diminishing, if not de facto
abandonment, of the
U.S. long-term commitment to Taiwan; and its damaging effect on critical regional alliance
relations. Yesterday’s Wall Street Journal offered yet another area of Mr. Clinton’s
“engagement” policy that is cause for serious concern: The Administration apparently is
inclined to permit China’s entry into the World Trade Organization (WTO) on Beijing’s
terms and timetable.

The thoughtful Journal editorial, entitled “Another Gift to China?” (see href=”index.jsp?section=papers&code=98-C_124at”>the attached), explains
what is at stake:

“China wants to enter the trade organization as an emerging economy, a
status that
would allow a longer grace period for lowering barriers to free trade and investment.
Developing economies, for example, have a whole decade to cut the value of their
export subsidies by 24% and the volume of subsidized exports by 14%. For developed
economies, the figures are 36% and 21% and the time frame is six years. The WTO,
backed by the U.S., has so far refused to grant China such a provision.

“And for good reason. Emerging-economy status, itself of doubtful
validity, is
nonetheless reserved for countries of negligible economic impact. China’s
economy is the world’s seventh largest, bigger than Canada’s and Russia’s, with a
GDP climbing toward the trillion-dollar level. Making allowances for a country
of this size discredits a trading system that has to be seen as fair and
impartial in applying international rules.” (Emphasis added.)

More ‘Engagement’ on China’s Terms?

Unfortunately, the prospect that the U.S. government will accede to Beijing’s demands that
the
WTO bend to its will — rather than insist that China play by the same rules established for the rest
of the world — is not only of a piece with the rest of the Clinton Administration’s policy of
appeasing the PRC. It is also likely to prove but a foretaste of the heavy-handed manipulation of
the trade organization that can be expected from the Chinese should they be admitted.

China’s accession to the WTO will likely have undesirable repercussions beyond the trade
arena,
however. Consider, for example, two implications that may bear adversely on U.S. national
security and/or foreign policy interests:

• Permanent MFN status: China would be spared the scrutiny to which its
  policies are
  currently subjected as a result of the requirement annually to renew its Most Favored Nation
  status. While this would please Beijing and its lobbyists in the United States business
  community, it would deny the Congress an important vehicle for holding both the PRC and
  the
  executive branch accountable for China’s ongoing, systematic abuse of human rights and its
  proliferation of weapons of mass destruction and other dangerous technologies, as well as its
  predatory economic practices. Just as President Clinton’s decision to de-link approval of MFN
  renewal and China’s human rights record has translated into a steady increase in repressive
  behavior by the Communist regime in Beijing, it is predictable that eliminating the
  reviews
  currently required under U.S. law will translate into worse behavior by the PRC on all
  fronts.
• Undercutting unilateral economic sanctions: Entry by China into the
  WTO membership
  will give Beijing new mechanisms to resist U.S. efforts to penalize it for conduct deemed
  inimical to American interests. The precedent for such use of the trade organization has been
  established by the European Union which has, in recent months, used the threat of recourse to
  the WTO’s dispute resolution mechanism to induce the United States effectively to neuter
  provisions of its domestic law — notably, the LIBERTAD (a.k.a. Helms-Burton) Act and the
  Iran-Libya Sanctions Act. To be sure, as the Casey Institute has previously noted, href=”#N_2_”>⁽²⁾ the
  Clinton Administration has been a willing partner in such eviscerations. Still, should China
  become a member of the WTO, even a more robust American government would find it
  difficult to sanction the PRC in the event Washington believed such a step to be warranted
  (e.g., in the wake of a future Tiananmen Square-style massacre).

The Bottom Line

The Casey Institute commends the editorial board of the Wall Street Journal for
illuminating the
extent to which the United States risks being taken to the proverbial cleaners on the
trade
front should it permit premature Chinese WTO membership on highly privileged terms,
terms that are not only undeserved, but that would be damaging to the international trading
system. (Matters will be made worse if — as President Clinton has implied with his notorious
embrace of Beijing’s “three noes”
— one of the world’s economic powerhouses, Taiwan, will be denied the opportunity to join the
trade organization.⁽³⁾)

The Casey Institute urges, however, that consideration also be given by Congress, the media
and
the American people to the harm that could be inflicted on U.S. national security and other
interests were China to receive, through WTO membership, what amounts to permanent MFN
status to Beijing and further protection against the imposition of economic sanctions by the
United States government.⁽⁴⁾

– 30 –

1. See the Center’s Decision Brief entitled
Clinton Legacy Watch # 28: ‘Peace For Our Time’
With China (No. 98-D 122, 6 July 1998).

2. For a discussion of how the EU and Clinton Administration have
connived to undermine these
U.S. laws, see the Casey Institute’s Perspective entitled By
Eviscerating Economic Sanctions,
Clinton Leaves No Policy Choice Between Inaction and Military Strikes ( href=”index.jsp?section=papers&code=98-C_87″>No. 98-C 87, 19 May
1998).

3. Today’s Washington Post features an op.ed. by Rep.
Sherrod Brown (D-OH), which points
out that the application of this “three noes” principle is also excluding Taiwan from participating
in the World Health Organization. As a result, the children of Taiwan are not receiving the
medical help the WHO could provide to reduce, if not completely to eradicate, the fatal effects of
a virus now killing them by the score.

4. For more on measures that threaten to deny the U.S. government
this important policy
instrument, see Terms of ‘Engagement’: Lugar Anti-Sanctions Measure Could
Preclude
Important U.S. Security Policy Options (No. 98-C
117, 22 June 1998).