The fifth annual Asia Pacific Economic Cooperation forum hosted by US President Clinton at Seattle was designed to be a round of informal discussions where members could freely express their opinions primarily on improving and liberalising trade in the region. No nation was expected to dominate the talks, but most attention was clearly centred on President Clinton and his Chinese counterpart Jiang Zemin.
It was the highest-level meeting between the two nations since February 1988 when President Bush met former President Yang Shangkun. The cool relations between the two countries that developed after the Tiananmen disturbances had worsened in May this year when President Clinton signed an executive order conditionally tying the renewal of Most Favoured Nation (MFN) status with significant improvements in arms proliferation, the trade deficit and human rights. It was hoped that the private encounter between the two leaders would lead to closer relations between the two countries and an understanding at least on how to make progress on the differences at issue. Unfortunately, nothing of substance appears to have emerged from the meeting between the two heads of state.
Of the three issues in contention which present most.problems to the renewal of MFN, China's progress in human rights is the most controversial. At their meeting during the November 1920 forum, President Clinton expressed his desire to at least reach some initial and basic understandings with China. But he was answered with a 15-minute speech from President Jiang on the importance of not interfering in another country's affairs ? a direct criticism of the Clinton administration.
China has made some gestures but these were unsubstantial, such as Foreign Minister Qian Qichen's "positive consideration" of allowing Red Cross officials to visit Chinese political prisoners. There are reportedly also laws under consideration restricting the scope of national security laws and defining more narrowly crimes against the state. These, however, were described only vaguely and no timeframe was given for their implementation ? certainly not before June when MFN comes up for renewal. President Jiang's message was clear: there would be no room for compromise until the US stops linking trade with human rights.
Despite this, the prevailing view is that Clinton would like to be able to renew MFN for economic reasons. APEC members account for 40 per cent of world trade, 50 per cent of all US exports worth US$224.6bn and 60 per cent of all US imports worth US$532.7bn. In comparison, EC C countries account for 26 per cent of US exports and 21 per cent of US imports.
As the Chinese economy is expected to continue to grow and dominate the region in the coming decades, the US must shift its focus from Europe towards the Asia Pacific area to stay competitive. The US cannot afford to jeopardise substantial revenue by restricting Chinese trade privileges. Renewal of MFN may result From a softening of US requirements or a complete decoupling of conditions if Clinton can persuade Congress that the Chinese are serious about improving their record in the three key areas.
The executive branch of the government has already indicated its willingness to compromise. US Secretary of State, Warren Christopher, in a meeting with Foreign Minister Qian, approved the sale of a US$8m Cray supercomputer, on the condition that it be used for non-military functions. This broke with previous policy and indicated that concessions were not out of the question. The Cray sale was explained away by US officials from a purely financial standpoint as helping the ailing manufacturer, which made it more difficult for Congress to help.
While the talks were not widely seen as a complete success, a positive note was struck at its conclusion when President Jiang extended an invitation to President Clinton to visit Beijing. The unyielding approach of Jiang during the talks could reflect pressures from hardliners in the Chinese capital where anti-American sentiment is strong and political jockeying continues in preparation for Deng Xiaoping's death. By inviting President Clinton to Beijing, the Chinese leader has placed the impetus of improving relations and finding a solution for the MFN debate squarely on the US. *
Batey Burn, 701 California Tower, 30-32 D'A uzlar Street, Central, Hong Kong. Tel: +852810 0211, Fax: +852 8101788