to a friend.
Robert A. Kapp
November-December 2000 Issue:
Cover by John Yanson
Bobbing in the Wake: Thoughts on the Aftermath of PNTR
Please remember:
If China is not solidly in the WTO by next spring, the United States will be looking at yet another legally required debate on annual renewal of NTR.
This was a memorable occasion for the hundred or more of us privileged to attend the signing ceremony, on the South Lawn of the White House, in the brilliant sunlight and sharply drawn shadows of late afternoon. Seasoned regulars suddenly popped out mini-cameras for snapshots. Political figures so often publicly at loggerheads mingled cordially and easily, sharing a moment's celebration of an accomplishment founded on their decision to work together.
On hand were the men and women, from both the public and private sectors, who had done the heavy lifting in support of final passage of this long-contested legislation. Many of us, I'm sure, felt a momentary flush of that familiar intense camaraderie that had begun to recede into memory at the moment the Senate completed its approval of PNTR. Many of us, I suspect, felt as well a feeling of awe that the task had finally been accomplished after years of such intense controversy, and a twinge of regret that--for now, at least--the coalition in which we had all participated would begin to dissipate as new assignments drew its members in new directions.
As one small contributor to the effort on behalf of the US-China Business Council's members, I felt that we had both done well and done good.
As the battle for PNTR became history, the world was moving on. With the completion of Congress's work providi ng for full WTO-member treatment for China upon China's accession to the World Trade Organization, this being Washington, a variety of noises old and new could already be heard. Herewith a sampling, with my responses:
- "Maybe the comfortable old annual NTR review was not such a bad thing; after all, it brought all the vociferous China critics together in one place for one big, loud, but ultimately ineffectual annual display. Now, with that channel closed to them, they'll find who knows what other ways to roil the waters."
My response: Thanks, but keep your nostalgia. Let's not get weepy about the annual MFN/NTR explosion, or minimize its perpetual capacity to do real harm. And let's not start pining for the operatic performances that accompanied the annual renewal extravaganza. Enough was enough long before Congress passed legislation to end the annual ritual. - "PNTR is no magic bullet: Its supporters oversold it as a panacea and cure-all for all of the maladies in US-China relations. The American people were sold a bill of goods and now must live with the reality that PNTR doesn't resolve those US-China differences."
My response: First of all, no, we didn't oversell PNTR; have a look at "At Crunch Time" in this space for May-June 2000. Or check it out at the Council's website, at: www.uschina.org/public/preslets/0005.html.
But second of all, let us remember that US rejection of PNTR would have made further progress on many other US-China issues far more difficult. Let us be glad that we no longer have to deal with the NTR albatross as we confront both commercial and non-commercial issues with China. And let us turn our attention to realizing the positive results of full WTO-based commercial relations, when China achieves WTO membership. - "Many in China, some representing powerful economic and other interests, perceive serious challenges and dangers in Chinese WTO membership, and would just as soon delay China's accession to the WTO for a couple of years."
My response: Such a delay would not be helpful. Please remember: If China is not solidly in the WTO by next spring, the United States will be looking at yet another legally required debate on annual renewal of NTR. There will be a new president just settling into his new job; a new Congress of uncertain outlook, likely reluctant to walk carefully through China trade policy subtleties again; and a new list of emerging policy priorities for both. While PNTR upon China's WTO accession is US law, we should not underestimate the mischief that could be caused by delay in completing the accession process.
And we should not misinterpret the strength of the PNTR votes in the House and Senate thi s year. Those impressive votes were taken at a very particular moment, on the wings of colossal efforts by congressional champions, a mobilized administration, and a US business community that focused its energies in a manner that was very hard to do once and would be even harder to do twice. It would be unwise to take any of those components for granted in other circumstances on other issues, especially if China's WTO accession were to fail to materialize in a timely fashion. - "Let's discuss how very difficult this WTO accession is going to be for China."
My response: Absolutely. We all need to discuss it, across the Pacific and within our own countries. It is the height of irresponsibility to lurch into actions without considering their consequences, as we have argued over and over again in opposition to NTR cancellation and other ill-advised recommendations to lash out against US-China trade. The world and China both need to understand the magnitude of the changes in economic conduct facing China under WTO mandates.
But we must make a key distinction. It is one thing for China to engage with the international community to strengthen and accelerate the difficult process of achieving full WTO implementation according to the bilateral agreements China concluded with many WTO members, including the United States, and according to the final accession documents that, as The CBR goes to press, still await completion. American businesses, and certainly the US-China Business Council's members, are eager to contribute productively where they can to helping China successfully pursue its arduous voyage under WTO guidelines and obligations.
It is something else entirely, however, to contemplate a campaign to educate the world as to why China might not comply with its written agreements. Neither international business nor international policymakers will respond favorably to that approach. In the PNTR struggle just concluded, we argued to Congress that it would be extremely counterproductive for the United States, after finally concluding a bilateral WTO Accession Agreement with China embodying Chinese commitments to fulfill a long list of American requirements, to say to China, by turning down PNTR, "Sorry, we didn't really mean it."
The United States, backed by the strongest possible efforts of a broad business community, has taken the step it needed to take to ensure that China's WTO membership would link our two nations in a new and productive manner.
Now it is China's turn. We have every reason to believe that China's embrace of WTO membership represents a decisive action of historic significance in China's development as a great modern nation. We look forward to celebrating China's final steps to ensure that same outcome, and to embarking on a new voyage together, without undue delay.
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