Lobbyists spin MFN for Beijing

0 Comments | Insight on the News, July 21, 1997 | by John Berlau

Pro-China business lobbyists armed with a wealth of economic statistics launched a successful preemptive strike on Capitol Hill against attempts to scuttle 'most favored nation' trade status for China.

With billions of dollars at stake in one of the toughest fights in years about the renewal of "most favored nation," or MFN, trade status for Communist China, America's business lobby stormed congressional offices armed with arguments about how such trade affects the bread-and-butter interests of their constituents. Horrendous scenarios projecting both revenue and job losses were promulgated.

"We identified for every member of Congress what China's purchases from their state were," recalls John Howard, director of international policy and programs for the U.S. Chamber of Commerce, a leading advocate of aid and trade for Red China. "I can tell you for any given state what they exported to China by industry group. You want to know what Alaska sold to China? I can tell you right now that in 1996 Alaska sold over $3.1 million worth of food and related products to that country and $13-plus millions of petroleum and related products. Every member of Congress got a letter and a document tailored to his or her state's interest in the Chinese market."

Robert Hall, vice president and international-trade counsel for the National Retail Federation, or NRF, which says it represents more than a million retail stores that sell imported Chinese goods, similarly is boastful about his group's effort to lobby Capitol Hill lawmakers. "I'll give you a run-down of what NRF did in the course of this year," Hall tells Insight. "We held over 200 meetings with members of Congress, primarily members of the House, to talk about the importance of continuing MFN with China. Through our industry, we generated thousands of letters and telephone calls to members of Congress that we believed to be undecided in the last few weeks of the debate. We generated a number of one-page fact sheets on China that we distributed on the Hill twice a week for the last several weeks of the debate."

Not to be outdone, the American Farm Bureau Federation "pestered the [Clinton] administration and lobbied the Hill," says its associate director of public relations, Don Lipton. When representatives of regional farm bureaus came to Washington for their annual convention a few months ago the national bureau sent them to the Hill to tell their members of Congress that denial of MFN would hurt American farmers, who exported more than $2.6 billion in crops to China last year.

The national bureau also organized a coalition of associations of specific commodity producers in support of MFN. "I talked to cattle-country congressmen to make sure they have cover and arguments to explain" why a vote for MFN would benefit cattle ranchers, recalls Chandler Keys, vice president of public policy at the National Cattleman's Beef Association, one of the groups participating in the Farm Bureau coalition.

When asked what the United States should do about China's abuses of human rights, the MFN lobbyists say trade should be treated as a separate issue, but are short on specifics. They generally argue that trade improves human rights by raising China's standard of living and increasing its contact with the West. "You look at China today compared to 15 or 20 years ago, it is a far better place ... and I personally do not see a made-in-the-USA solution to China's domestic problems in this regard," says the Chamber of Commerce's Howard. Never mind that human-rights organizations say China's treatment of its people still is abysmal after decades of expanded trade with the West.

Many business lobbyists now are saying China should be allowed to enter the World Trade Organization, or WTO, which would eliminate the need for annual renewal of MFN. "It's time to get this annual ritual behind us," Howard says, and no human-rights requirements should be imposed for entry.

Howard adds that the Chamber of Commerce also is "keeping a very close eye on the so-called alternative" legislation floated in the wake of the MFN vote. Many members of Congress who supported allowing companies to trade with China oppose subsidizing such business deals with U.S. tax dollars.

A bill introduced by Michigan Republican Sen. Spencer Abraham and one proposed in the House by California Republican Rep. Chris Cox, would reduce US. funding to international lending organizations if they finance ventures in China and would instruct U.S. representatives to vote against lending to businesses dealing with China. Texas Republican Rep. Ron Paul, who says he voted for MFN because of his libertarian belief in free trade, tells Insight, "I'd cut off all subsidies. Not one penny of taxpayer subsidies through foreign aid, Export-Import Bank, OPIC [Overseas Private Investment Corp.], anything." Howard says the Chamber of Commerce would be opposed to these provisions because they would give foreign firms a competitive advantage in getting loans, and wants to remove all unilateral US. economic sanctions against China. Critics and even some supporters of MFN say the benefits the business lobbyists have touted wildly were exaggerated, and were in any case concentrated in only a few industries. Alan Tonelson of the US. Business and Industrial Council, an organization that opposed MFN, concedes in a policy paper that "since 1988 US. exports to China have grown faster (138 percent) than US. worldwide exports (94 percent)," but says that a 1996 report by the pro-MFN National Association of Manufacturers "indicates that more than one-third of total US. merchandise exports are generated by only eight large companies," including military-industrial giants Boeing Co. and General Electric Co.