White House efforts to obtain permanent normal trade relations status for China went into overdrive Feb. 23 as new obstacles to that goal continued to arise.
U.S. Trade Representative Charlene Barshefsky told the Senate Finance Committee that the Clinton administration is prepared to do everything in its power to build support for granting permanent NTR.
"I think the administration has no intention of losing this," she told Sen. Daniel Patrick Moynihan, (D-N.Y.), who scolded Barshefsky for not moving quickly enough on a specific proposal to draw up legislation that would grant permanent NTR to China.
"You're going to lose this. And it's going to go down in history as the first major loss" in more than a half century of trade legislation, Moynihan said.
Last week Vice President Al Gore reportedly told AFL-CIO President John Sweeney that if Gore were elected president, he would renegotiate the terms of the U.S.-China accession deal if congressional efforts to grant permanent normal trade relations status were unsuccessful. After Clinton administration officials and the National Association of Manufacturers took issue with the Gore's reported statements, Gore reiterated his support for the existing deal, while still promising to seek environmental and labor concessions in future trade negotiations (36 DER A-21, 2/23/00).
Then Beijing issued a white paper Feb. 21 threatening to attack Taiwan if it did not cooperate in negotiations to reunite with mainland China.
Roth Sees 'Giant Step Backward.'
Sen. William V. Roth, (R-Del.), told Barshefsky the Taiwan issue and Gore's labor comments have begun to erode support for future legislation in the Senate, which had been considered to be strongly in favor of the extension of permanent normal trade relations.
"I feel obliged to say that WTO accession and the passage of Permanent Normal Trade Relations in the Senate is not a forgone conclusion," Roth said.
The chairman of the Senate Finance Committee warned Barshefsky that despite his support of her efforts, there is a growing movement to block the extension of permanent NTR.
"I'm sorry to have to say ... there's been a giant step backwards rather than forwards," Roth said. "I have to tell you again that the statements made both by the Chinese and the vice president are most troublesome."
Barshefsky pledged to work with the two lawmakers and others, but Moynihan said there is no reason an initiative couldn't be drafted immediately, and he offered to "do it right at lunch."
The top trade negotiator for the Clinton administration passed on that offer, promising only to "work with you and the members of the committee to bring forth a proposal as soon as possible and as soon as is comfortable for the members of the committee and the Congress."
No New Laws
After the hearing, Barshefsky said the White House would oppose any congressional attempt to create laws making it easier for Washington to enforce trade agreements between China and the United States.
"We do not believe additional legislation is required," Barshefsky told reporters after testifying at the hearing on China's pending accession to the World Trade Organization.
A week earlier at a hearing on the same topic at the House Ways and Means Committee, Rep. Sander Levin, (D-Mich.), proposed a strengthening of existing trade laws in concert with new legislation that would provide a mechanism to invoke the special anti-import surge provision of the U.S.-China bilateral agreement signed in Nov. 1999 by Barshefsky and her Chinese counterpart, Shi Guangsheng.
"Our lawyers have looked at this. They believe that 1974 Act Section 124 provides ample authority for the president by administrative means to put into place the product-specific special safeguard with respect to China," Barshefsky told reporters after the Feb. 23 hearing
The comments mark a change from the more receptive tone of her testimony to the Ways and Means Committee, where Levin is a top-ranking Democrat.
"I think that Congressman Levin has a number of very positive suggestions," Barshefsky said at the time.
Sperling Speaks
Clinton's top economic aide, Gene Sperling, was also making the case for China Feb. 23, and said Beijing's recent threats to attack Taiwan should not derail congressional commitment to pass permanent NTR for China.
"So, we expect this to be a tough fight, but we are confident that we will prevail," Sperling told reporters after a speech at the Economic Strategy Institute.
And Sperling said China has verbally assured the United States it would not block Taiwan's accession to the WTO once Beijing becomes a member.
"I have personally been in meetings with top-ranking Chinese officials where they have made very clear that once they are into the WTO, they will not in any way object to accession of Taiwan into the WTO, and we have no reason to think otherwise," he said.
Daschle Pessimistic
Sen. Tom Daschle, (D-S.D.), said China's recent threats toward Taiwan have dealt a setback to efforts to persuade members of Congress to vote for permanent normal trade relations with Beijing.
"They are very unhelpful in terms of moving the legislation through," the top ranking Democrat told reporters after meeting with White House Chief of Staff John Podesta at the White House on agricultural topics.
"My guess is those comments could not be more counterproductive, and I've heard that from both sides of the aisle in the last 24 hours." The permanent NTR vote "has always been in jeopardy," Daschle said.
The vote, if taken today, would be a close call in Congress, particularly in the House, he said. Daschle said Vice President Gore's comment to organized labor that he would he would add labor and environmental protections to the China legislation were it to fail this year should not deter Democrats from voting for permanent NTR.
"A bird in the hand this year is a lot better than maybe two in the bush next year or the year after," Daschle said. "I think we've got to take what we can get this year and move on to try to improve our trade laws in other venues as those opportunities present themselves in the next Congress."
Sino-European Talks Continue
In Beijing, talks between China and the European Union on China's accession to the WTO were extended for another day, an EU official said Feb. 23.
The talks, which began Feb. 21, were scheduled to last for two days, and this is the second extension, prompting speculation that both side are close to signing a deal.
EU officials disclosed little, saying only that Johannes-Friedrich Beseler, director-general of the trade directorate-general at the European Commission, would continue talks with China's chief WTO negotiator, Deputy Foreign Trade Minister Long Yongtu, on Feb. 24.
The talks are covering a wide range of issues and could last through the week of Feb. 20, said a Western diplomat close to the European negotiators.
"It doesn't look like they're going to close this week," the diplomat said. "The EU continues to take a firm line that is not desperate to close this. They're not rushing it when there's no real reason."
The Western diplomat cautioned that both sides have large negotiating teams with them--the EU has over a dozen representatives--an indication that many technical areas are still being addressed. Another reason for lengthy talks is that the Chinese negotiators, led by the Ministry of Foreign Trade and Economic Cooperation, have delegates from different ministries at the table to appease worries about concessions.
Last November, talks with the United States team also dragged on for days as both sides wrangled over issues like access to the telecommunications market.
EU Commissioner for Trade Pascal Lamy had earlier said he would be willing to fly to Beijing to sign a deal. His spokesman declined comment.
By Corbett B. Daly, Mark Felsenthal, and Shai Oster:
