With little fanfare or press attention, corporate America has been quietly conducting one of the most sophisticated and expensive lobbying campaigns seen in Washington since business pushed through the North American Free Trade Agreement. The aim is to win permanent most favored nation (M.F.N.) trade status for China, whose vast market and dirt-cheap labor force cause the hearts of C.E.O.s to flutter with excitement.
China has had M.F.N. since 1980 but, because it doesn't allow freedom of emigration as called for by the 1974 Jackson-Vanik Amendment, must have its trade privileges reauthorized by the President every year. Congress can block the decision if both chambers pass a resolution of disapproval within sixty days. The stakes in the battle are enormous. Bilateral trade between the United States and China hit $57 billion in 1995, and U.S. investment in China has climbed from $358 million in 1990 to $25 billion in 1996.
To achieve their goal, the Fortune 500 companies coordinating the M.F.N. campaign have been hiring scores of lobbyists and P.R. flacks, planting pro-China Op-Eds in the press and paying for public forums stacked with panelists friendly to Beijing. "The corporate campaign has no financial limits, be it political contributions or wining and dining or paying for lobbyists," says California Representative Nancy Pelosi, a leading critic of China. "The companies don't care what they spend because the payoff to them is so enormous." Several Hill staffers I interviewed estimate that the overall business effort for China is budgeted in the tens of millions of dollars per year.
That money is buying results. On January 7, the first day of the 105th Congress, Representative Doug Bereuter of Nebraska introduced a bill that would eliminate the M.F.N. process. Instead, Bereuter–whose election campaigns are generously financed by the China lobby– would automatically grant the status to all members of the World Trade Organization, to which Beijing has an application pending. In the Senate, Democrats such as Max Baucus of Montana and Tom Daschle of South Dakota take the more direct approach. They support giving permanent M.F.N. status to China, regardless of whether it is allowed to join the W.T.O.
Last year, following a fierce battle, President Clinton's extension of China M.F.N. was approved by a lopsided margin. Even so, China's corporate allies detest the annual review expected this year in June–because it leads to an embarrassing discussion about business alliances with one of the world's worst human rights abusers.
Back in 1990, only a few dozen firms were actively lobbying on China's behalf. Today the Business Coalition for U.S.-China Trade has 800 members, mostly big companies but including trade associations and the Business Roundtable, the National Association of Manufacturers and the U.S. Chamber of Commerce.