Barshefsky Pushes PNTR for China

By JONATHAN S. LANDRETH

(Virtual China News -- Mar. 1) By giving up the annual trade relations review process that China has been subjected to since the 1970s, the United States would gain rather than lose leverage in pushing for internal reforms for the world's most populous nation, Charlene Barshefsky, the U.S. Trade Representative said Tuesday.

Permanent Normal Trade Relations (PNTR) for China would "lock in" the favorable terms of the historic bilateral trade agreement Barshefsky helped to negotiate with Beijing last November. The trade deal is contingent on China being granted PNTR by the U.S. government.

For years the annual extension of NTR (formerly known as Most Favored Nations Status or "MFN") to China has been used by Congress as a bargaining chip to prod China into showing greater respect for the UN Declaration of Human Rights. That type of carrot and stick diplomacy is no longer effective in helping to foster internal reform, Barshefsky argued. Acknowledging that much of China's political system remains "repressive and authoritarian," warranting the sponsorship by her office of a resolution in the UN Human Rights Commission condemning China's record, Barshefsky stressed the need to see the situation with historical perspective.

Critical mass

"If human rights have gotten worse, then what leverage is NTR?" Barshefsky asked rhetorically of a questioning member of the audience of more than 250 bankers, scholars, government employees and journalists gathered in the Waldorf Astoria hotel in Manhattan.

Annual review of NTR for China "doesn't really help to create a critical mass of support for reform within China," Barshefsky said, citing the former Soviet republics that have entered the World Trade Organization since the fall of the Berlin Wall as examples of the positive effect free trade can have in fostering internal reform.

"Every one of those countries will tell you that they need to be in the WTO because that's the way that they will cement internal economic reforms," Barshefsky said, speaking of countries such as Latvia and the Kyrgyz Republic, whose economies were shattered after the collapse of the Soviet Union.

National reform initiated wholly from within is very hard to accomplish, Barshefsky said. If there's an external source pushing for reform, however, "that provides political cover for economic reformers to do the job they know needs to get done. It's exactly the same rationale in China." "I don't view the loss of annual NTR as a loss of leverage," Barshefsky said. "I view intead the WTO agreement as creating essentially the kind of leverage that we in the global community need."

China's entry into the WTO now hinges on the completion of its bilateral trade agreements with the other member states of the World Trade Organization. Yet to be completed are negotiations with the European Union, a WTO member that broke off its talks with Beijing just short of a deal last week.

Split vote

A panel discussion preceding Barshefsky's keynote address focused on predicting when there would be a vote by Congress regarding China's permanent NTR status. The panelists, who asked that they not be named or quoted, differed widely in their predictions. Some members of the panel, including a banker studying Chinese currency and an insurance executive for a major American company agreed that a vote to extend PNTR to China would not occur until after this fall's American Presidential election.

Two other panelists, one a trade scholar and the other a journalist, felt sure that Congress would offer PNTR in the next few months and China would accede to the WTO in September this year.

In any case the bill proposing permanent NTR for China has yet to even be presented in Congress. However, efforts by much of the U.S. business community to ensure it will see full trade enagement with China in the WTO have increased dramatically. Over the last two weeks Hollywood and Silicon Valley lobbies  both added their pro-China trade voices to the mix.

Free speech

After her speech, Barshefsky was presented with an award for service by Carl Spielvogel, a trustee of the event's primary sponsor, the Asia Society, a non-profit organization dedicated to advancing understanding of Asia in the West.

Following the award presentation award two young women claiming to be journalists unfurled a Tibetan flag and repeatedly shouted "Free Tibet before free trade!" from the back of the room before they were escorted out by hotel security. China has kept Tibet under tight control after invading the Himalayan country and claiming it as its own in 1949.

To reach Jonathan S. Landreth: jslandreth@virtualchina.net