Saturday, April 14, 2007

Gephardt on China Trade: "Not a Clear-Cut Issue"

The House Minority Leader explains his opposition to permanent normal relations until progress is made on human rights

Washington's hottest lobbying battle so far this year is the Clinton Administration's proposal to grant China permanent normal trade relation status (PNTR, formerly called most-favored nation status). The Administration agreed to do so last November as part of a deal it reached with Beijing over China's entry into the World Trade Organization. Europe is blocking China's WTO application, but the White House is strongly pushing to normalize U.S. trade relations with China anyway.

The House is scheduled to vote on legislation to grant China PNTR during the week of May 22. The final tally is still very much in doubt. Business is pushing for the legislation, but the AFL-CIO, environmentalists, consumer groups, and human-rights advocates are opposed. Business groups expected House Minority Leader Richard A. Gephardt (D-Mo.) to oppose PNTR. But Gephardt took his time announcing his intentions. Meanwhile, he worked to raise campaign funds for Democrats. Finally, on Apr. 19, he announced he would vote against the bill. On Apr. 26, he talked with Washington Trade Correspondent Paul Magnusson about his decision. Here are edited excerpts from their conversation:

Q: You are being criticized by some in the business community for stringing them along and taking their money while pretending to be for PNTR, or at least neutral on the issue.
I have made it very clear throughout this period that I have grave concerns over China's membership in the WTO. I felt those fears could be allayed if we got enforceable human rights included in the legislation. I have been trying to work that out with the Administration, but we couldn't reach an agreement. You know, people are reading too much into all of this. This is not just an issue of business vs. labor. It's our job to resolve these conflicts if we can. Of course, I know there is going to be criticism of my decision.

Q: Given the fact that you feel so strongly about human rights in China, why have you said you'll not try to influence others? Why aren't you going to try to also persuade your fellow Democrats to vote against the bill?
I talk to Democrats all the time about my concerns. I think there is a misapprehension about how members make up their minds. These people are not robots. They're humans who represent half a million people, and they hear from their constituents time and again. They know the issue. Members do ask me, and I tell them how I came to my conclusion. But I don't think anyone is going to lobby anyone else on this issue. There is merit on both sides. This is not a clear-cut issue.

Q: You have paid particular attention to the high-tech community, and China PNTR is one of its biggest issues. Can you truly be for high-tech businesses yet oppose them on PNTR?
Technology CEOs have a number of goals at any one time. Sometimes I agree with business, sometimes not. Sometimes I agree with the workers, sometimes not. But my record on trade is one that follows certain principles. I was for creation of the WTO in 1996. I voted for fast-track [negotiating authority] for President Bush in 1991 because I felt that free trade and free-trade treaties are good. I voted to replenish the International Monetary Fund and the World Bank when the economies of Asia were in trouble in the 1990s.

When there is a move I can make to support free trade, I am for it. But I worry about treaties that don't properly include human and workers rights and the environment. In [the North American Free Trade Agreement], which I ultimately opposed, we could have done better. Today, the real wages Mexicans earn are still lower than they were in 1980. While there has been an increase in trade, the basic problems have not been addressed at all by NAFTA.

Q: You have proposed a code of conduct for U.S.-based multinationals investing in China. How would that work?
I had a bill three years ago that set out a mandatory code of conduct. At the time, the Administration and some businesses were talking about a voluntary code of conduct. But it must be mandatory. We have companies that are already complying with a code of conduct and doing a good job, and I give them credit for that. But if it is not mandatory, you have some companies doing it and others not. And that encourages more companies not to do it.

Q: Representative Sander Levin (D-Mich.) has been trying to find a compromise that would grant China PNTR but still monitor its behavior in human rights and the environment, and its compliance with WTO rules. Were his proposals too weak to be useful?
I encourage him to continue to work in a constructive way to strengthen this deal. Levin is leading the effort on trade and trying to do the right thing. From my viewpoint, I came to the conclusion that it was impossible to ensure meaningful enforcement. There needs to be a strong enforcement mechanism. I know he is working with others trying to construct a way.

Q: Why are the Democrats taking the risk this election year of a vote that will only have the potential to alienate the labor unions, their strongest allies, which happen to oppose PNTR? From a political standpoint, what sense does it make when the Democrats are so close to winning back control of the House?
Under the law, we have a vote on NTR for China each year in June. The President grants it to China, and then Congress approves it or not. But once the Administration reached a deal with China to allow it into the WTO, it was going to be hard to take an annual vote on NTR but avoid a vote on PNTR.

I commend the Administration for putting PNTR up to a vote, and I commend [House Speaker Dennis J.] Hastert (R-Ill.) for scheduling a vote. I would support annual NTR on a probationary basis until human rights in China improve. But I'm opposed to PNTR.