THE OTHER KEY TO A SOUND US POLICY ON CHINA

THE OTHER KEY TO A SOUND US POLICY ON CHINA

Despite the claims of advocates, permanent normal-trade-relations (NTR) status is only one element of a meaningful China policy. The changes in U.S. law and review procedures for China's behavior that are included in the proposal of Reps. Sander Levin, D-Mich., and Doug Bereuter, R-Neb., are at least as important to establishing a sound policy toward China as granting that country permanent NTR.

After what seems like an endless run-up, Congress is finally moving to pass permanent NTR status for China. This will help pave the way for China's entry into the World Trade Organization and end Congress' annual ritual of voting on China's trade status.The Levin-Bereuter proposal, however, contains a number of useful provisions.

First, it makes provision for close oversight of China's progress in implementing its WTO commitments.

Second, it creates legislation to implement the procedure negotiated by U.S. trade negotiators allowing the United States to impose special limits on imports from China that disrupt the U.S. market.

Third, it creates a commission to focus ongoing attention on China's observance of human rights.

Finally, it states the sense of Congress that Taiwan should be allowed to enter the WTO on the same schedule as China.

The provisions aimed at enforcing the WTO agreement with China are particularly important. China has an abysmal record of keeping the trade commitments it has made. Despite some statements made in the debate by administration officials, China has violated every recent trade agreement with the United States on topics from market access to prison labor.

Even the agreement to protect intellectual property, often held out as a success, has shown poor results. According to industry estimates, piracy rates in China remain more than 90 percent, and economic losses due to piracy have actually risen since the most recent effort to enforce the agreement.

WTO membership may bring multilateral pressure to bear on China to improve its trade performance. But the WTO is also likely to have considerable difficulty enforcing its rules in a country without an established rule of law and with an entirely opaque process of making trade policy.

The only hope of making real progress in forcing China to live up to its commitments is an ongoing effort on the part of both the United States and the WTO.

Almost since the day it was negotiated, the administration's WTO accession agreement with China has been sold to the nation in large part upon the safeguard that allowed the United States to restrict imports that disrupt the U.S. market. In concept, this provision was significant.

Without legislation to implement it, however, the safeguard would likely mean nothing. The next president might simply ignore it and, without a petitioning procedure, the affected domestic industry would have no way of triggering it. Fortunately, after some apparently heated negotiations, the House Ways and Means Committee passed legislation to implement this safeguard.

In another important provision, the Levin-Bereuter proposal creates a commission - modeled on one used to address similar concerns in the old Soviet bloc - to monitor progress in China on human rights. Both the Congress and the administration would have a direct role under this formulation.

Finally, the proposal includes a resolution calling for Taiwan to be admitted to the WTO. Unquestionably, Taiwan is a stronger candidate for WTO membership than China. To date, however, by employing intermediaries, China has been able to keep Taiwan out of the WTO.

Reportedly, Beijing has agreed to Taiwan's membership once China becomes a member. Given China's poor record of keeping promises and its obvious antipathy toward Taiwan, the United States should spare no effort to hold China to its word and ensure that Taiwan also enters the WTO this year.

Critics will quickly and rightly point to weaknesses in the Levin-Bereuter proposal.

The enforcement provision is limited by the inability to impose sanctions inconsistent with the WTO. The safeguard provision was inappropriately weakened in the legislative drafting process. A commission is not able to fundamentally alter Beijing's attitudes on toleration of dissent. Finally, congressional resolutions on Taiwan and other topics will have limited impact upon the Beijing Politburo.

Still, there are benefits to binding China - at least on paper - to obeying WTO rules, and these new procedures do ensure continued focus on the right issues.

With this focus, the president, the Congress and the WTO can continue to push China down the road to reform. The House, the Senate, and the administration should all work to ensure that the Levin-Bereuter proposal is passed along with permanent NTR and becomes an integral part of U.S. policy toward China.

Without it, permanent NTR would prove a flawed and ultimately disappointing policy.