China Trade>
Monday May 31, 10:28 am Eastern Time
Clinton to seek one-year trade renewal with China
By Donna Smith
WASHINGTON, May 31 (Reuters) - With hopes fading of an early agreement to bring China into the the World Trade
Organization, President Bill Clinton is expected this week to ask Congress for a simple one-year extension of U.S. trading
privileges for China.
He is expected to ask on Thursday for just a one-year renewal because negotiations on a broader deal with China have suffered a
series of setbacks.
These include the failure of Clinton to strike a deal with Chines Premier Zhu Rongji during his visit to the United States in April, the bombing of the Chinese Embassy
in Belgrade earlier this month and the release of a scathing report last week alleging Chinese nuclear spying.
Even a scaled-down request for renewal of China's trade status -- once called Most Favored Nation (MFN) and now named Normal Trade Relations (NTR)-- for
just one year will likely spark an intense battle in Congress, where China bashing is in vogue.
''I think there are people who are going to perceive that trade is another avenue for espionage,'' said Russell Smith, a trade lawyer with Willkie Farr & Gallagher.
Congress can vote to overturn Clinton decision to renew trade benefits. NTR gives China the same low-tariff access to U.S. markets as nearly every other country in
the world.
Labor unions oppose it, but business groups plan to fight hard for it and trade analysts believe that in the end lawmakers will heed the arguments of the business
community and back Clinton's decision.
The debate could set the stage for a much bigger battle over granting permanent NTR to China as part of its bid to join the WTO. The administration had hoped to
sew up a trade deal with China on its WTO entry by the time Clinton made his decision to renew normal trade ties for another year. That would have given
lawmakers the opportunity to consider permanent NTR at the same time.
Those hopes have faded in the shadow of NATO's accidental bombing of China's embassy in Belgrade. There have been no WTO negotiations with China since the
bombing and none have been scheduled.
Both U.S. and Chinese officials have said they would like to see China enter the global trade body by the end of the year which would subject Beijing to global
trading rules in time for a new round of trade liberalization negotiations expected to be launched in Seattle in December.
A major problem is the report on Chinese spying, assembled by a special House committee headed by Rep. Christopher Cox, a California Republican, which has
raised doubts about whether lawmakers would go along with normalizing trade relations with China.
''Obviously, the Cox report creates a difficult context,'' Undersecretary of State Stuart Eizenstat told reporters last week.
''But I think it's important that Mr. Cox himself took great pains to differentiate between the issue of what China may or may not have done with respect to nuclear
secrets on the one hand and trade with China on the other,'' Eizenstat said.
At a news conference last week, Cox said he would support China's entry into the WTO on commercially acceptable terms adding that what negotiators have gotten
so far from from Beijing was not enough to meet that standard.
''But I would separate that set of issues from security issues such as the extent of our military cooperation and the extent of our preparedness and counterintelligence
issues which respond directly to the espionage threat that is outlined so richly (in the report),'' Cox said.
Senate Majority Leader Trent Lott, though, has urged caution on a WTO trade deal with China.
Also, Sen. Jesse Helms, a North Carolina Republican who heads the Senate Foreign Relations Committee, and Rep. Benjamin Gilman, a New York Republican
who heads the House International Relations Committee, urged Clinton in a letter last week to suspend the trade talks while Sino-U.S. relations undergo a review.
They were joined by two senior Democrats who sit on their committees.
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