After 13 years of negotiations, the United States
and China have agreed to terms on China's entry into the World
Trade Organization (WTO). A similar deal expected with Canada and
the European Union makes China's accession to the WTO nearly
inevitable. Although Congress's approval is not required in this
process, Members of Congress have a role in determining how much
the United States will benefit from the fruits of these hard fought
negotiations. Early next year, they will vote on whether to extend
on a permanent basis China's normal trade status with America--a
fundamental benefit afforded all WTO members. Denying normal trade
relations to China will not block its accession to the WTO. But it
would deny the United States (and no one else) all of the market
access concessions China offers in the process.
Debate is already underway over how
beneficial or harmful this trade pact with China will be for U.S.
interests and whether it will lead to positive changes in China.
Policymakers should be cautious in considering the polarized views
that characterize most China or trade policy debates. One side
argues that American jobs will be sacrificed to Dickensian Chinese
factories and a modernizing, hostile military, while the other
heralds the advent of a liberal trade era in China fostered by its
integration into a rules-based international institution.
reality, China's membership in the WTO is not likely to
dramatically increase U.S. investment and participation in China's
market in the near future , nor is it likely to ignite a passion
for liberal democracy within China's borders. But neither will it
hinder America's ability to protect its national security interests
and promote freedom in China.
Benefits. The U.S.-China agreement
is a step in the right direction, despite the fact that it will
take several years before China's market-opening pledges are
realized. The policies in the agreement would advance U.S.
commercial interests by:
Expanding China's private sector.
Private sector expansion will do more than increase the potential
consumer base for U.S. exports. It also will limit Beijing's
ability to micromanage people's lives and free China's citizens
from the world's largest welfare state.
Implementing the Trade Related
Investment Measures (TRIMs) Agreement. Full implementation of
the TRIMs Agreement will protect firms from forced technology
transfers, local content requirements, and foreign exchange
restrictions. Especially in the area of dual-use technology, this
agreement should help improve protection of sensitive U.S. military
technology and valuable intellectual property.
Moderating China's external
behavior. The WTO's multilateral mission to reduce import
barriers will limit China's ability to continue its past practices
of playing one trading partner against the other and raising
mercantilist barriers to foreign competition. Making China a
stakeholder in a multilateral regime also will increase the
likelihood that Beijing will abide by the WTO's rules and
- Setting a precedent for other
economies. The terms to which China has agreed are an important
benchmark for future membership offers. Saudi Arabia and Russia
lead the list of nations currently seeking WTO membership.
What's Required. To ensure that the
U.S.-China WTO agreement delivers these benefits without
compromising significant U.S. security and human rights interests,
Insist on Taiwan's simultaneous
accession to the WTO. The WTO may prove to be the most
effective legal framework through which China and Taiwan can manage
current and future economic interaction. Taiwan is America's 7th
largest trading partner and the world's 7th largest investor.
Taiwan's accession, unfortunately, has been delayed for political
Find a new forum to address human
rights and national security concerns. Permanently extending
normal trade relations to China will eliminate an annual forum for
debate over U.S. policy toward China. Advocates of extending
permanent normal trade relations to China should work with their
opponents to establish an effective means of addressing legitimate
human rights and national security concerns.
Continue national security-based export
controls. Because the WTO's primary focus is banning import
barriers, export controls are not subject to its rules. Since the
United States now maintains national security-based controls over
exports to current WTO members, China's WTO membership should not
affect the application of such controls over sensitive U.S. exports
to China. To be effective, however, Washington should establish a
forum to discuss national security-based export controls with U.S.
Establish non-sanction methods to
address human rights. Washington should do more than publicly
denounce Beijing's retrograde steps to subdue or intimidate
perceived threats. It should support positive measures within China
that foster the foundations of domestic freedom (from the rule of
law to markets and elections), and improve relations with China's
neighboring states that are making significant progress toward
- Hold China to WTO discipline. The
United States must be as vigorous at enforcing this agreement as it
was in negotiating its terms. Policymakers should understand that
while most Americans view a contract signing as the close of
negotiations, the Chinese traditionally view it as the beginning of
new negotiations on how to implement the agreement.
Conclusion. The United States
should welcome China's commitment to market liberalization and
reform, as represented in this WTO accession agreement, by
extending normal trade status to China on a permanent basis. With
presidential and congressional leadership support next year, China
likely will be granted permanent normal trade status. It is
critical, however, that policymakers view the conclusion of 13
years of negotiations as the beginning of a long period of
implementation. The success or failure of this agreement rests upon
as much details as on the determination of American leaders to
continue to press for progress on security issues, human rights,
Stephen J. Yates is a
former Senior Policy Analyst in the Asian Studies Center at The