FULL INFORMATION AND DEBATE NEEDED ON CHINA

FULL INFORMATION AND DEBATE NEEDED ON CHINA

As an election-year congressional session gets under way, one of the hottest topics of speculation concerns the timing of congressional votes on permanent normal trade relations (NTR) for China.

The Clinton administration and its backers are pushing for a vote on NTR, formerly known as most-favored-nation status, no later than this summer, but some seem less anxious to vote in 2000. The debate over timing should, however, be secondary to ensuring that Congress has complete information before the vote.Currently, an obscure 1972 trade law requires the Congress to consider NTR for China on an annual basis. Since such status is a cornerstone of the World Trade Organization, China expects the United States to extend it on a permanent basis as a quid pro quo for the reforms it must implement to gain WTO membership.

Permanent NTR, however, requires a change in U.S. law that must be approved by Congress. The election-shortened legislative calendar for 2000 and the pace of China's WTO negotiations with its other WTO partners raise questions about whether this vote can or should occur this year.

Assuming that vigorous efforts are made to enforce a WTO agreement with China, China should be granted WTO membership and permanent NTR by the United States.

That said, because of the outdated and peculiar balance of power between the president and the Congress on WTO accession, this vote will be Congress' only chance to make itself heard on the issue of WTO membership for China. Were it not for the need to amend the 1972 law, the Clinton administration could usher China into the WTO without Congress ever having a direct opportunity to vote on the issue.

Moreover, this is a final vote. As a practical matter, once China is in the WTO, its membership is not reversible. Any oversights or shortcomings in the accession protocol that brings China into the WTO are essentially beyond repair, unless China is willing to accept the changes.

Unfortunately, Congress has not yet even had the opportunity to review the final accession protocol - because it does not exist - or even to publicly review the details of the U.S.-China agreement struck last November.

At this stage in the accession process, each of China's major trading partners negotiates bilaterally to win concessions that are then incorporated along with understandings on the application of various multilateral rules into a final accession arrangement.

A number of trading partners, notably the European Union, are still negotiating with China. These talks could materially change the U.S. trade prospects resulting from China's WTO membership.

Beyond that, many of the multilateral rules that will be applied to China in the final protocol are critically important. Such matters as the application of state trading rules to China's vast state sector and the application of subsidy rules to its web of government supports are primarily addressed in the multilateral protocol.

There are also important enforcement issues related to the multilateral protocol, such as the frequency and schedule for reviews of China's trade policies.

Although it should shock many, the details of the bilateral agreement struck between the United States and China last November have still not been made public.

The administration notes that the agreement is available to members of Congress and, on a limited basis, to interested companies. This, however, is obviously not nearly the same as opening it to full and complete public debate, which would allow potential critics to scrutinize the text and notify Congress of their concerns.

The administration argues that the secrecy is needed to accommodate Chinese concerns. If the United States were to accommodate China's true wishes, the agreement would likely never be released. China is still upset by the release of some negotiating details after talks last spring, but this is the way in which public business is supposed to be conducted in an open society.

Releasing the agreement while other countries are still negotiating with China might allow them to improve the agreement, which would also serve U.S. interests.

If Congress waits to vote on permanent NTR until the negotiations are complete and the agreement has been subject to full public debate, it is possible that the vote might occur in 2001 instead of 2000. For the Clinton administration, which leaves office in 2000, this would certainly be a blow.

Despite the whispered threats, however, China hardly seems likely to retaliate against U.S. interests if Congress chose to vote in February of 2001 rather than July of 2000.

Congress would be well advised to ensure that it has all information and the opportunity for a complete public debate before granting China permanent normal trade relations.