SCMP Monday, May 22, 2000


Showdown in the House

"The Congress doesn't run - it waltzes" was first said about an assembly in Vienna, not Washington. But that acerbic remark certainly applies to the American legislature as, finally, it dances slowly and reluctantly towards one of its truly important votes of recent years.

The vote is about whether to grant Chinese products full access to the US market when the mainland joins the World Trade Organisation, possibly at the end of the year. The most important ballot will come on Wednesday, when a sharply divided House of Representatives is scheduled to take up the measure. Passage by the Senate is a foregone conclusion.

The outcome is crucial to the overall Sino-American relationship, and therefore to all Asia. In particular, it will affect Hong Kong because the complex ties between the US and China are central to the SAR's own continued economic and political well-being. If those relations go sour, there will be adverse effects on Asian trade, investment, growth and social tranquillity, with Hong Kong suffering from them all.

The best guess is that the bill to grant China what are called Permanent Normal Trading Relations will pass by a narrow margin, thereby avoiding the worst. But there are few sure things in congressional politics. Some legislators who secretly favour the bill would like to vote against it for tactical reasons, figuring that would help their own re-election chances as they leave others to put together a positive majority. If the bill's backers grow overconfident and let support slip away, they could yet lose.

The consequences of failure, as a leading American Sinologist said recently would be "awful". Many Beijing leaders already believe the US is conspiring against Chinese economic development and its emergence as a world power. They see containment where Americans promise engagement, and they suspect the long wait for WTO membership may be part of an anti-China strategy. If the House does vote no, their worst fears would seem realised and the US overall relationship could only grow worse indefinitely. And they are right to a limited degree, for an American minority does view China in Cold War terms, seeing a rising adversary rather than a potential partner. Yet much opposition to the trade bill is complex and less clearly defined, which explains why Congress has spent so much energy delaying its showdown vote and why the outcome has remained so uncertain for so long.

Some US politicians and those who try to influence them oppose the bill because they claim the Sino-American agreement about WTO membership is not good enough. Like the European Union, they want better terms, or at least stronger assurances about enforcement. They contend, with sad experience as their guide, that China may well evade its free market commitments even if it does not break them outright.

Others treat the WTO like a global club of the good guys, and insist China is not a worthy member because of its manifold human rights violations. In addition, some Congressmen do not like the word "permanent" in the trade bill to grant China full market rights; they want to preserve an annual vote about access as a means of exerting influence on how China treats its own citizens. Finally, some fight the bill because they oppose broader trends in the world economy, the globalisation they say helps the rich and hurts the poor by widening social divisions. This has less to do with China itself, but these opponents see rejecting anything about the WTO as one way of holding back unwelcome change.

None of these arguments is wholly irrational, but they miss some main points. The American market is already one of the world's most porous; protectionists fail to grasp that this bill would require China to move faster in the same direction. Over time, that would bring enormous gains to global trade and living standards. Moreover, joining the WTO would propel China towards establishing the rule of law in deed as well as word. Nothing would do more for Chinese civil rights than to have in place a reliable and transparent legal system - something woefully lacking at present.

Rejecting the trade bill would have big impact on the US. China would become a WTO member anyway, but without much obligation to give Americans equal market access. It would not take long before companies with names like Boeing, General Electric and Caterpillar watched from the sidelines as their European and Japanese rivals signed fat contracts.

But the trade bill is about much more than trade. It is really about pulling China into world affairs on normal terms, and helping it become a responsible participant in a broad range of global concerns. On Wednesday, Congress will show whether it truly understands the issue.