The Buzz

Leveraging Beijing: How Trump Can Avoid His Predecessors' Mistakes

Introduction:

This piece provides a historical account of the Clinton Administration’s failed attempt to impose human rights conditions on the extension of China’s Most-Favored Nation (MFN) trading status in 1993 and 1994. The conclusion is that “getting tough” with Beijing is a high-stakes poker game. If the new administration wants to play, they should avoid four key mistakes that the Clinton team made. First, Trump should focus on economic instead of political reforms. Second, if he is going to sanction China, he should do so at the outset instead of granting an initial grace period. Third, he should work to mask opposition to this assertive agenda from within his cabinet. Finally, as an initial strategy, he should simply enforce existing legislative mandates and bilateral trade agreements, as opposed to imposing new restrictions.

Clinton’s Failed Experiment with MFN Conditionality:

Like Donald Trump in 2016, Bill Clinton vigorously criticized China in his 1992 campaign. Clinton endorsed Congressional attempts to impose conditions on China’s Most-Favored Nation (MFN) trade status, much the same way that Trump has promised to use sanctions, tariffs, and other economic tools to fight back against Beijing’s mercantilist economic policies. Once in the Oval Office, however, Clinton faced dissension within his cabinet about whether to follow through on these campaign promises, and Trump is likely to encounter similar internal resistance.

In deference to these internal skeptics, Clinton agreed to water down this conditional approach in three key respects. First, he limited the conditions to human rights issues and excluded many of the economic, trade, and national security conditions that Congressional supporters had proposed. Second, instead of demanding immediate compliance, Clinton opted to give Beijing a full twelve months to meet the conditions before revoking MFN. Third, in order to preserve the administration’s flexibility in determining what constituted sufficient progress to justify renewing MFN, Clinton issued the conditions through an executive order as opposed to legislative action.

After finalizing these alterations, President Clinton signed Executive Order 12850 on May 28, 1993. In signing the order, Clinton celebrated the end of “annual battles between Congress and the Executive over MFN,” and proclaimed, “We no longer have an executive branch policy and a congressional policy. We have an American policy!”

The celebrations were short-lived, however, as Beijing refused to comply with any of Clinton’s conditions. This intransigence climaxed during Secretary of State Christopher’s first visit to Beijing in 1994. The Chinese unleashed a verbal lashing on Christopher that long-time diplomat Winston Lord would later describe as “the most brutal diplomatic exchange I’d ever witnessed.” In roundly criticizing conditionality, the American business community also undermined the administration’s credibility and leverage with Beijing. The trip was such a disaster that Christopher considered resigning as Secretary of State.

As a last-ditch effort, the administration sent Richard Armacost to Beijing in the final weeks before the 12-month grace period was set to expire. Armacost was scrambling for even minor concessions that would allow the administration to extend MFN without a total loss of face. Sensing the administration’s desperation, however, the Chinese did not budge. Ultimately, Clinton folded and extended MFN, despite Beijing refusing to meet his conditions. Clinton justified this capitulation by arguing:

“Extending MFN will avoid isolating China and instead will permit us to engage the Chinese…I am moving, therefore, to delink human rights from the annual extension of most-favored-nation trading status…The question is not whether we continue to support human rights in China, but how we can best support human rights in China…I believe we can do it by engaging the Chinese.”

In response to Clinton’s abandonment of conditionality, Congressional leaders were outraged, leaving Clinton to face the same bitter dispute with Congress that George Bush had faced and that Clinton had so desperately hoped to avoid. Indicative of Congressional furor, Senator Jesse Helms, the chair of the Senate Foreign Relations Committee, rebuked:

“The President is discarding what he once proclaimed to be steadfast principles. And he is doing it in a shameful kowtow to China’s Communist emperors…As a candidate, Mr. Clinton viciously attacked George Bush for ‘coddling the dictators in Beijing’… However, once in office, President Clinton has preferred Mr. Bush’s soft approach”

In the end, America’s ambassador in Beijing, Stapleton Roy, confessed in an interview, “We made an enormous mistake by linking our human rights interest to our trade interest.” Henry Kissinger summarized the failed experiment in his book On China by observing:

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