Most-Favored Status Is Not a Perk

The threat of stiff U.S. economic sanctions against China for continued pirating of American products will cast a long shadow on the coming debate in Congress over whether to extend China’s most-favored-nation trading status for another year. Although there are indications that the Senate will support the extension, backing in the House is far less certain, with rancorous opposition gaining momentum and anti-China rhetoric in the U.S. reaching inflammatory new heights. The impending sanctions notwithstanding, China’s MFN status should not be put in jeopardy each year.

One newspaper article called most-favored-nation status a “perk” in U.S. trade relations. This is just plain wrong. “Most favored” is a misnomer. MFN is the normal trading status the U.S. maintains with all nations, a handful of rogue states excepted: Afghanistan, Serbia, Cambodia, Laos, Cuba, North Korea and for the time being, Vietnam. Even as we have thoroughly isolated Iran and Iraq with economic sanctions that outweigh any value of MFN, we have not revoked their MFN status. And South Africa, during its darkest period of apartheid, maintained most-favored-nation status while the U.S. joined international efforts to press for change through economic sanctions. So clearly, there are other tools the U.S. can use if necessary and warranted.

The United States currently has a $50-billion annual trade relationship with China, our eighth largest trading partner. U.S. trade with China has been growing at a rate of 17% each year, translating to nearly 200,000 U.S. jobs. Revoking the trade status for China would be shooting ourselves in the foot. If that point is lost on anyone, the $2-billion contract China signed for the purchase of 33 French Airbus airplanes last month should be convincing evidence that if the U.S. does not wish to provide goods to the third largest economy in the world, our allies are more than willing to do so.

We should grant most-favored-nation status to China on a permanent basis and get past the annual dance that is proving to be extraordinarily divisive and not at all helpful toward reaching the oft-stated goal: improvement in human rights.

Tying most-favored-nation to improvement in human rights is ineffective at best and counterproductive at worst. Revoking the trade status would be seen by China as the United States promulgating a complete break in Sino-American relations, putting in grave danger U.S. strategic interests in Asia.

It must be remembered that for 5,000 years, China has been governed by rule of man: thousands of years of despotic emperors, tyrannical regimes and leaders with near-mythical stature. It is now striving to develop a rule of law.

Just 30 years ago, China was engaged in the massive upheaval of the Cultural Revolution and Great Leap Forward, during which 20 million Chinese were either killed or imprisoned. Human rights were at their lowest point. Since then, the positive changes in China have been dramatic. Chinese society continues to open up with looser ideological controls, freer access to outside sources of information and increased media reporting. More people in China vote for their leadership on the local level than do Americans. Economic liberalization is introducing market forces into the economy. Educational levels are up, along with wages and the standard of living.

The government also is moving forward with judicial reforms aimed at professionalizing judges and lawyers, and introducing due process of law--the legal cornerstone of respect for human rights. The last People’s Congress enacted legislation to prohibit holding a person in custody for more than 30 days without legal counsel and to end the practice of administrative detention whereby people are picked up and jailed without recourse.

These significant changes are a direct result of greater economic and cultural engagement with the West. This is not to minimize real problems that do exist; it is only to recognize that changes are taking place.

The U.S.-China relationship is the most important and sensitive bilateral relationship in the world today. Placing China on a short list of rogue nations to whom we deny MFN trading rights would be an irreversible step in the wrong direction and a severe blow to U.S. national interests. Moreover, it would not move even one step forward in advancing the human rights of 1.2 billion Chinese citizens.