SPEAKING
FREELY Washington's schizophrenic China
policy By Donald Alford Weadon
Jr and Carol A Kalinoski
Speaking
Freely is an Asia Times Online feature that allows
guest writers to have their say. Please click hereif you are interested in
contributing.
Next week, pragmatic
US Treasury Secretary Henry Paulson Jr and Federal
Reserve chairman Ben Bernanke will lead an
unprecedented pride of US cabinet secretaries
(notable among
them
the secretaries of commerce, labor, energy, health
and human services, and Trade Representative Susan
Schwab) who will land in Beijing for a week of
high-level, high-stakes consultations. The topics
will include market access, intellectual-property
protection and the remarkable US trade deficit
with China.
But accompanying them like an
odiferous dark cloud will be the prospect of the
China Military Catch-All Rule (see US blunders on with China
military-export rule, Asia Times
Online, September 22), now concluding the last
days of an extraordinary 150-day public-comment
period before being acted upon by the proposing
Bureau of Industry and Security (BIS) of the US
Department of Commerce.
The pendency of
this roundly disparaged proposal is truly a wrench
in the works for any consistent US trade policy
with China, and represents the undiminished power
of post-Cold War attitudes toward China that,
despite the recent congressional election mandate,
still energizes elements of the US administration.
While Paulson, all too familiar with
China, well knows that atmospherics are critical
to effective, high-level negotiations, it is
telling that he has neither commented on the
dysfunctional rule nor insisted that the plug be
pulled on what even Larry Wortzel, chairman of the
congressionally chartered (and generally
Sinophobic) US-China Security Review Commission,
has recently termed a poorly crafted and
ineffectively unilateral regulation.
The
stated objective of the proposed rule is to
embargo generally available US goods otherwise
eligible for sale to China that could make an
otherwise undefined "material contribution to
[China's] military capabilities". There is a
growing body of informed comment, both in academia
and industry, that modernization of the Chinese
military is not exactly a bad thing in a global
community.
Multilateral export controls
can contain significant military advances, but it
is clear that the unilateral embargo of
decontrolled and ubiquitous dual-use goods and
technologies that have no essential military
character is a strategic misstep. While it may
make the US administration's anti-China cabal feel
good, it will wreak havoc on ordinary commercial
and financial relationships between the United
States and China, as well as those between the US
and its trading allies doing robust business with
China.
That the United States has been
unable to achieve any consensus among the
Wassenaar Arrangement [1] nations on this issue is
an indication of how benighted an idea the
proposed catch-all really is. Certainly, if it had
any utility, the US would have been able to obtain
"buy-in" from at least one allied government over
the past two and a half years during which BIS
alleges it has sought consensus.
But
nothing attains momentum in Washington, DC, like a
bad idea, and the stakes are high for BIS and the
administration in making this proposal "stick".
While earlier BIS China initiatives have been
hastily withdrawn (the extension of the Deemed
Export regime to individuals born in China,
regardless of their citizenship, was recently
withdrawn after harsh criticism and tossed to a
blue-ribbon panel), it has been made clear by BIS
and the administration from the outset that the
military catch-all would be rammed down the
throats of industry regardless of the damage it
would do to the US economy or trade relations with
China.
In fact, the newly confirmed
assistant secretary of BIS, Chris Padilla,
insisted both in confirmation hearings and as
recently as last month that the roll-out of the
final catch-all rule was a "done deal".
But industry comments lodged thus far have
been aggressively negative on all fronts and urge
withdrawal and collegial re-engineering of the
rule. A few comments, though, are curious. Anxious
not to rile BIS and possibly fearful of a denial
of "access" and other retaliation by upset BIS
caretakers (BIS has been without an under
secretary for more than six months), one group
merely laid out yards of negatives and
dysfunctions, but failed to call for withdrawal, a
most unusual situation: in other US regulatory
regimes, the mere recitation of only a few of the
identified disasters in the proposed rule would
mandate withdrawal.
By all accounts,
however, the rule is due for withdrawal and
significant structural overhaul after detailed
consultation with the Wassenaar allies, US
industry and the BIS technical advisory groups -
something lacking in the preparation and initial
roll-out of the proposed catch-all rule.
But regardless, the Chinese do read the US
Federal Register daily, can easily access the
public comments, and have been acutely aware of
the manifold problems and industry opposition to
the proposed rule well before the initial
publication on July 6.
And having
concluded that the United States is not capable of
creating a consistent and sustainable position on
trade issues where there is a glimmer of "mutual
benefit", the Chinese will, as they have done
before with other hapless US emissaries (Alexander
Haig, George Shultz and others), quietly divide
and conquer, sending Paulson and his fellow
emissaries home with a scintilla of dignity but
absolutely no results.
The US taxpayer and
the all-important US-China relationship - which
will dominate this century - deserve better
coordination, consultation and tending.
Note 1. The Wassenaar
Arrangement on Export Controls for Conventional
Arms and Dual-Use Goods and Technologies is an
arms-control arrangement with 40 participating
states that replaced the Cold War-era Coordinating
Committee for Multilateral Export Controls, or
CoCom, in 1996. It was established in Wassenaar,
Netherlands.
Donald Alford Weadon
Jr is a Washington, DC-based international
lawyer. An expert in trade controls and China
trade, he has counseled firms in export controls
and customs issues in China for nearly three
decades, and can be reached at
dweadon@weadonlaw.com. Carol A Kalinoski
chaired the BIS Operating Committee, the
principal US government export-control
dispute-resolution panel, for nearly nine years.
She practices law at Carol A Kalinoski &
Associates in Washington, DC, and can be contacted
at kalinoski2003@yahoo.com.
(Copyright
2006 Donald Alford Weadon Jr and Carol A
Kalinoski. Used by permission.)
Speaking Freely is an Asia Times
Online feature that allows guest writers to have
their say. Please click hereif you are interested in
contributing.
