Taiwan Communiqué No. 76, June 1997

Trading with China

The American MFN debate

When Mr. Clinton became President he made the (right) decision to link adherence to human rights by China and the annual extension of MFN-status. However, in 1994, and again in subsequent years, he caved in to pressure from major corporations wanting to do business with China and decided to delink the two issues again.

The Administration's main arguments in favor of extension are that MFN-status is "normal" trading status, and that extending it will accelerate economic reform and a free market system, which will nudge the PRC towards democracy.

To any observer, it is clear that economic relations with China are not "normal", but as out of balance as can be. One glance at the trade balance between the United States and China confirms this (see figure below).

Another essential piece of information seems to be escaping the policy makers in Washington: China is far more dependent on trade with the U.S. than the U.S. is on trade with China. About 40 percent of China's exports go to the United States, while less than 2 percent of U.S. exports go to China. The U.S. exports more to countries like the Netherlands and Belgium than to China.

The Administration's argument that trade is helping human rights and democratization in China sounds as hollow as ever with the continuing crackdown on democracy activists in China itself, increasing repression in Tibet and East Turkestan, and the slow strangling of civil liberties in Hong Kong.

It seems the American population is having its doubts too: a Wall Street Journal/NBC poll published in the beginning of May 1997 showed that 67 % of Americans want an improvement of human rights in China, while only 27% are in favor of maintaining good trade relations.

House Democratic leader opposes MFN for China

In an excellent speech before the Detroit Economic Club on 27 May 1997, House Democratic Leader Richard A. Gephardt voiced his strong opposition to extending MFN-status to China. Mr. Gephardt stated that the United States must use MFN-status as a tool to effect change. He emphasized that MFN is a privilege that has to be earned, and stated that Beijing has forfeited that privilege. Mr. Gephardt stated:

"Basic human rights are universal aspirations, not a cultural preference. The totalitarians who rule China ... openly express their contempt for the ideals of freedom. In a speech before the UN General Assembly, last October, China's President denounced it as a ploy to undermine China's independence."

We must not join that chorus, or offer assent by silence or appeasement. For brave men and women in China, freedom is more than fine words and easy rhetoric.; for it, they have sacrificed their personal liberty and too often, even their lives. Don't tell them that their human rights are a Western idea, a European idea, and that no Asian need apply. Don't excuse tyranny by insulting its victims."

Further in his speech Mr. Gephardt stated:

"Human rights is, at the heart, about the rule of law. A government that can arbitrarily violate the liberty of its people cannot be trusted to abide by the rules of contract or the rights of companies. .... We now hear the same arguments for constructive engagement with China that we heard about South Africa. But nothing fundamental changed in South Africa until sanctions came....."

"The United States has no business playing "business-as-usual" with a Chinese tyranny that persecutes Christians, Muslim leaders and leaders from many other faiths ... sells the most lethal weapons to the most dangerous of nations, profits off slave labor, and engages in ... forced abortion."

"... what have we gained by trafficking with a tyranny that debases the dignity of one-fifth of the human race. What is gained by a policy that sees all the evils and looks the other way? What is gained by constructive engagement with slave labor? Our trade policy with China has failed not only on moral grounds, but economically as well."

The full text of Mr. Gephardt's speech can be obtained on the Internet at URL http://www.house.gov/democrats/speeches/dec-trade.html

Mr. Gephardt's strong and forthright position stands in stark contrast to the waffling of the Clinton Administration: a few days after Mr. Gephardt's speech, Mr. Clinton's National Security Advisor Sandy Berger tried to defend extending MFN to China in a speech before the Council of Foreign Relations in New York. Mr. Berger attempted to imply that American security interests would suffer if Congress voted to deny China's MFN-status.

Link MFN-Status to responsible behavior

Taiwan Communiqué comment: Mr. Gephardt is right and Mr. Berger is wrong: the U.S. and other nations around the world will only benefit if China learns to play by the rules and respects universal human rights.

It is self-deception to think that more trade with China will automatically lead to economic and political reform. The developments over the past three years only indicate that China is becoming a more powerful, hostile, and belligerent bully, which is less likely to be restrained by the niceties of human and political rights, and more apt to break agreements on anything from non-proliferation to trade.

Congress has until September 1997 to decide on the MFN-renewal issue. We strongly suggest that Congress rejects it: during the past year, China has not shown itself to be a responsible member of the international community, it has violated non-proliferation and trade agreements, trampled the rights of the Tibetan people, and threatened Taiwan with missiles and military maneuvers.

The U.S. should make it crystal clear to China that MFN-status can only be extended if China abides fully by non-proliferation and trade agreements, fully respects human rights in Tibet and Hong Kong, and recognizes Taiwan's right to exist as a free and independent nation. The U.S. has the leverage, it should use it to stand up for the basic principles on which this nation was founded.

Cheers for Denmark, Shame on Chirac

The linkage between human rights and trade with China also came to a head in Europe in April and May 1997, when French President Jacques Chirac broke European solidarity on the issue of introducing the annual human rights resolution on China in the UN Commission on Human Rights. It was only the courage of small nations like Denmark and the Netherlands which allowed the resolution to be introduced, and continue pressure on China to respect internationally-accepted human rights.

China threatened that Denmark's and the Netherlands' initiative would "...severely damage relations in political, economic and trade areas." It even likened Denmark to a little bird whose head would be smashed by a rock. As the International Herald Tribune rightly concluded, while the Clinton administration was "de-linking" trade and human rights, China was doing just the opposite ("Caving in to China", International Herald Tribune, 14 April 1997).

The French, in the meantime, lamely referred to the so-called "joint declaration for global partnership" concluded during Mr. Chirac's May 1997 visit to Beijing, in an attempt to show that France did get China to talk about human rights.

Taiwan Communiqué comment: the Sino-French declaration fall far short of universality of human rights, by stating that it needs to take "...fully account of particularities on all sides" a sure way for China to avoid abiding by international human rights standards, and a carte blanche for them to continue to repress Tibetans and Uighurs, and threaten neighboring countries such as the Philippines and Taiwan.

As was rightly stated in an excellent editorial in the Washington Post ("France reaps its reward", Washington Post, 19 May 1997) France traded profit for principle, and allowed itself to be manipulated by China into dropping its support for the UN human rights resolution in exchange for a $ 1.5 billion Airbus purchase.

In the editorial, the Washington Post contrasted Mr. Chirac, who during his visit to China said that China "...will be one of the top nations of the world", with imprisoned Chinese dissident Wei Jingsheng, who when he was briefly permitted to express his views stated that China would never be a truly great country a "top nation" until it became democratic. The Washington Post concluded that Mr. Wei was nearer the truth than Mr. Chirac.

Apparently the French voters didn't like Mr. Chirac's hypocrisy either, and in elections for the National Assembly on 25 May and 1 June 1997 gave him a big vote of no-confidence.