From: Zuofeng Li <zuofeng@POLLUX.WUSTL.EDU>
Subject:      A Time Magazine Article on MFN
Reply-To: Zuofeng Li <zuofeng@POLLUX.WUSTL.EDU>
Organization: Indiana University
Date:         Tue, 28 Jul 1992 20:07:28 -0500
Comments: To: china-nt@uga.cc.uga.edu

How not to Break China

by Strobe Talbott

TIME, August 3, 1992

Once again, those would-be statesmen on Capitol Hill are trying to
micromanage American foreign policy and legislate morality in another
country--something Congress does often and badly.  Over the next several
weeks, the Senate will almost certainly pass a bill that would pubish
China for internal tyranny and irresponsible international behavior by
restricting its trade with the U.S.

The leaders of the People's Republic richly deserve sanctions.  The people
themselves, however, don't.  Ever since the Tiananmen Square massacre in
1989, Congress has been looking for ways to beat up on Deng Xiaoping, 87,
and his hard-line protege, Premier Li Peng.  In addition to repressing its
citizens and persecuting its opponents, the Chinese regime has been
selling lethal high technology to a number of potential troublemakers,
particularly in the Middle East.  As a result, Sino-American relations are
the worst they have been in 20 years.

George Bush has contributed to the problem by coddling the Deng-Li
gerontocracy, thereby provoking Congress to try to replace the
Adminstration's Mr. Nice Guy policy with its own tougher one.  It has been
17 years since Bush was U.S. envoy to China, yet he still seems to suffer
from the clientitis that sometimes afflicts ambassadors who represent the
views of their host governments too well.  Three weeks after Tiananmen,
the President dispatched National Security Adviser Brent Scowcroft and
Deputy Secretary of State Lawrence Eagleburger to kowtow in secret to
Deng, then sent them back several months later to toast him in public.

Largely in reacion to that craven and gratuitous behavior, Congress has
generated a flurry of bills that would attach political conditions to
China's most-favored-nation status.  In fact, MFN is a misnomer: it
implies special treatment but really means normal, equal treatment.  All
but a handful of the 187 countries on earth have MFN, including such
pariahs and miscreants as Iraq, Syria, Iran, Libya and Burma.

Over the years, Congress has tried to use the denial of MFN--or what might
more accurately be called the conferment of LFN (least-favored-nation)--
status as a stick to make countries behave.  It has never worked.  Instead
the use of trade as a political weapon has almost always backfired.  The
classical example is also the original one: in the mid-1970s,
congressional conservatives passed the famous Jackson-Vanik amendment,
which withheld MFN from the U.S.S.R. until the Kremlin agreed to let more
Soviet Jews emigrate.  Just to show who was boss, Leonid Brezhniv
*decreased* the number of exit visas by two-thirds.

The effort to link MFN to a foreign government's respect for human rights
is especially misguided in the case of China.  Since sanctions are
intended to keep Chinese-made products out of the American market, they
will harm, first and foremost, those Chinese who are involved in export
business.  That means manufacturers, merchants and wheeler-dealers who
benefited from the Good Deng's free-market economic reforms.  These
entrepreneurs are, in the main, liberals or at least apolitical.  Granted,
they are not as brave or noble as the pro-democracy activists who faced
down the Bad Deng's tanks in Tiananmen, but they are essentially on the
same side.  Their commercial success is part of the larger process of
coaxing China away from communism, and they are a key part of the
generation that will take over from the old men any day.

In order to meet this obvious flaw in the logic of sanctions,
Representative Don Pease, an Ohio Democrat, has come up with a twist that
may be clever enough to overcome both experts' opposition and President
Bush's certain veto.  The Pease bill, which passed the House last week,
would impose sanctions only on state-owned enterprises; it supposedly
exempts the private sector.

Actually, the measure is too clever by half.  It relies on a distinction
that is hard to define and impossible to enforce.  Take mohair.  The
textile mills that make the sweaters are largely state owned, but the
suppliers are independents.  Another example: silkworm cocoons are raised
by private farmers and small cooperatives, while the threads are woven
into silk scarves at state factories and sold by state trading
organizations.  In effect, the Pease bill penalizes everyone in the chain.

So curtaining MFN would hurt elements in China the outside world should be
trying to help.  It could also be disastrous for Hong Kong, which relies
heavily on thriving commerce in the People's Republic, and unwelcome to
Taiwan, which is quietly investing on the mainland.

Neither Hong Kong, Taiwan nor the booming Shenzhen Special Economic Zone
inside China itself has any representatives in the U.S. Congress, or any
votes in the Electoral College.  That is why the Senate will pass some
version of the Pease bill, and it is why Bill Clinton and the Democrats
endorsed a pro-sanctions plank in their party platform at their convention
in New York City two weeks ago.  It is easier for a member of Congress to
tell his constituents--or a candidate challenging Bush to tell the
voters--"I am against the butchers of Beijing!" than to explain how free
trade with China strengthens the reformers and moderates for the power
struggle to come.

The whole episode is a vivid reminder of the uneasy, often unhelpful
interacton between U.S. politics and foreign policy, especially in an
electon year.  Politicians are quick to embrace simple positions on
complex issues that make them feel good and look good--but in fact make
a bad situation worse.

*end*
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