Robert A. Kapp
We've been through this before. In the end, members of the US House of Representatives and the US Senate will still consider the economic and commercial content of the November 1999 US-China market-access agreement as the central question. They will recognize the folly of walking away from America's opportunities while handing those chances to our competitors. Thus Permanent Normal Trade Relations (PNTR) will win, on the merits. After the vote, we will all congratulate ourselves on the abiding built-in common sense of the American legislative process, and our overly chewed fingernails will gradually grow back.
Therefore, this will likely be my last letter to readers on the PNTR question. It will be good to turn to other topics. For now, though, a final wrap-up of key points:
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After all the distractions and all the politics, the merits are in full view. |
The extraordinarily rich content of the US-China WTO agreement of November 15 forms the substance of Congress's decision. The overwhelming preponderance of views--from industry, agriculture, high tech, and all manner of service sectors--stands behind PNTR as the necessary step that will ensure US access to China's economy on the terms to which China has agreed at our own insistence. As I said in an earlier letter, it is on Congress's shoulders to bring home to Americans the equality of economic opportunity that we won at the negotiating table, and not to turn America's back on those opportunities while our competitors throughout Europe and Asia capitalize on them.
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The anti-PNTR "leverage" argument does not stand up. |
The argument that PNTR must be discarded so that the United States can preserve "leverage" just doesn't hold water.
If China's accumulated record, viewed in the year 2000, is as grotesquely miserable as anti-PNTR critics say it is, why would anyone want to perpetuate the situation that failed for 20 years to improve it? What kind of mistaken nostalgia for the "good old days of annual MFN/NTR" is at work here?
Here is China, on the brink of WTO accession, agreeing to massive and bitterly painful behavior modification at our demand. Yet PNTR opponents insist that the United States cling to the same annual NTR renewal system whose abject failure is the starting point of the anti-PNTR tirade in the first place! If the old annual ritual had been as successful a form of "leverage" as anti-PNTR activists now suggest, there would be nothing to complain about today!
The whole anti-PNTR "leverage" line is in fact a diversion, attractive, perhaps, but simply insupportable on its face. We should not--and in the end, we won't--set ourselves up for a fall by conjuring for ourselves a mythic "leverage," and then compound the mistake by imagining that an act of self-mutilation will finally make that "leverage" materialize.
The real promise of genuine "leverage" in all this lies in China's binding international agreement to alter its entrenched systems of legal and economic cronyism and to abide by globally defined standards of conduct, on pain of international sanction, when it enters the WTO.
The real promise of genuine change lies in China's internal decision to continue forward along the paths defined by its WTO commitments. The United States should wholeheartedly support that decision, by establishing PNTR-based WTO relations with China.
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The argument continually thrown at the Congress--that passing PNTR is a "reward" to China--is hollow. |
China is submitting to a range of external requirements, backed by international sanctions, unlike anything that this regime or its predecessors has ever even approached before, in the teeth of intense opposition from nationalist/protectionist/Marxist-Leninist ideologues and zealots within Chinese society. China's unprecedented commitments are fact; Congress does not vote on them.
What Congress does vote on is whether the United States will be able to engage economically with China on this new basis or not, and whether the United States will thereby encourage China's further progress in these positive directions or not. If we walk, we discard our own future and embrace China's oft-criticized past. There's no "reward for China" involved here; the reward, which I am confident we will have the common sense to see and to seize, is for ourselves when PNTR passes and the United States enjoys full WTO-based economic relations with the PRC.
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On the core issues in the anti-PNTR onslaught--labor and environment--the Congress should stand on the side of full US involvement in China's economy, not against it. |
Take the labor issue. Twelve of America's most judicious academic specialists on China's economy, in a recent open letter, put it this way:
China's workers need higher labor standards, but opposing Permanent Normal Trade Relations for China is not going to help. To the contrary, China's participation in the WTO and the implementation of full WTO-member relations between the United States and China through the passage of...PNTR offer greater, more dependable prospects for progress on this long-term challenge.... Normal trade relations in the context of China's membership in the...WTO are an important way for China to raise the standard of living of its people. WTO membership will also contribute to the development of a law based system in economic relations.... China's low wages and often poor working conditions are mostly the result of China's poverty. Child labor similarly is more the product of families so poor that the small extra income these children bring in is important to family survival. China's failure to regularly and vigorously enforce its existing laws against child labor and poor labor standards reflects a system of law that is only slowly being reestablished after decades of neglect.... With China on the brink of entry into the WTO, what is needed is an energetic effort to help China enforce its own laws and to strengthen its legal system in general. Efforts of this sort have been underway for some time through bilateral and multilateral public and private bodies and have already born modest fruit.
Attempts to enforce labor laws by means of trade sanctions are by contrast a weak and blunt instrument for enforcing China's labor standards. Opposing PNTR and WTO membership for China would undermine the very forces that are contributing to rising standards for Chinese labor and enforcement of its existing labor laws. Denial of normal trading relations and resort to sanctions are also easily prey to abuse by special interests desirous of disguising their true protectionist purpose....Whoever may benefit from a sanctions approach to trade with China, it will certainly not be Chinese workers or their children.*
And on China's towering environmental problems, which indeed pose a threat not only to the country's enormous population but to the global commons, can anyone seriously believe that shutting China's door to the entry of US environmental services and US-based innovations in production, energy utilization, management, and market economics is going to make a positive difference? Can anyone maintain with a straight face that the long-term American foreign policy goal of drawing China into international commitments on the environment will be made easier if the United States turns its back at the last moment on the results of 13 years of WTO negotiation with the PRC?
The idea behind so many of the demands that the United States abandon PNTR, that is, that we stand on the sidelines with arms folded, waiting until China somehow passes some undefined American test for better behavior in these areas, is misguided. China is not the prisoner of the United States, and the United States is neither China's warden nor its parole board, notwithstanding the pretentious anti-PNTR rhetoric about "putting China on probation." Decking out the debate over PNTR with that kind of self-deception might again make good politics in the short run; in the longer run--longer than six months, in fact--it is a recipe for ignominious American policy failure, or worse.
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The "1979 bilateral trade agreement is good enough; no need for PNTR" distraction is in ruins. |
Don't ask me; don't ask business. Ask the General Accounting Office and the Congressional Research Service, the two key research bodies that report to Congress itself. That whole line of attack took up a lot of time and wasted a great many calories; it is discredited.
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The bottom line: loading PNTR down with all the baggage of America's dilemmas over China's modernization will not resolve those dilemmas. |
This truth is hard for some to accept, but that makes it no less true. Approving PNTR is not going to bring peace or war between the PRC and Taiwan. It will not create a two-party political system in Beijing. It will not create American-style judicial review or institute habeas corpus. It is not going to get people out of jail--or put them in jail. It is not going to alter the Tibet problem one way or the other. It will neither validate the "China Threat" theory so beloved of legions of paid publicists and policy consultants, nor make China into an earnest ally of the United States against enemies seen or unseen. Blaming PNTR for failing to achieve these miracles, or insisting that destroying PNTR will accomplish them, makes good marketing for some; it makes bad policy for all.
Conclusion: PNTR on the merits, not on dreams
We have a chance to play our part, along with the rest of the world, in a drama of real historical significance: the inclusion of China within the demanding expectations of a world trading system profoundly shaped by American ideas and American examples.
But let us not inflate our role beyond recognition. The drama will proceed with or without us.
Taking our part in the drama probably won't reinvent China; walking off the stage surely will not.
By taking part in the experiment just ahead, we open the door to American opportunities, both for economic betterment and for respectful American influence over the decisions that China will make for itself.
By walking off, we close that door and throw away the fragile chances we have for progress with China on matters of political and ethical concern to Americans.
And if PNTR were to go down, the United States would face infinitely heavier burdens trying to maintain a semblance of stability in its relations with China on all manner of other issues, including Asian regional relations. The implications of the PNTR vote do extend beyond trade in goods and services. But the notion that compromising a WTO-based US-China economic relationship will help to bring about "regime change" in China suggests a seriously overheated imagination.
That is why America's lawmakers will in the end enact this very, very modest change in American law, and ideally also turn to the long-term task of making sure China's WTO membership is good for us, good for China, and good for the world.
*Signatories to the open letter:
Loren Brandt, University of Toronto
Thomas R. Gottschang, College of the Holy Cross,
Fairbank Center for East Asian Research, Harvard University
Doug Guthrie, New York University
Gary H. Jefferson, Brandeis University
Lawrence J. Lau, Stanford University
Barry Naughton, University of California, San Diego
Dwight Perkins, Harvard University
Thomas G. Rawski, University of Pittsburgh
Bruce L. Reynolds, Union College
Scott Rozelle, University of California, Davis
Ezra F. Vogel, Harvard University
Martin King Whyte, The George Washington University