Page 2 of
2 SPEAKING FREELY Washington's China policy
turns psychotic By Donald Alford Weadon and
Carol A Kalinoski
annual "China
Military Power Report" to Congress announced on
May 25 in advance of Gates' trip to Singapore,
indicating that the US military consensus
regarding China's "threat" may well be in a
transition. The report underscores positive
improvements in the politico-military relationship
with China, and the development of an "open
dialogue" on military modernization topics to ensure
The China Rule surely sends an
inconsistent - if not confrontational - message to
the Chinese, and increases distrust and further
damages US trade and diplomatic relations with
China, not to mention US allies that will be
dramatically impacted by the rule and whose
companies will have incentive to engage in
commercial mischief against US companies to
leverage their competitive position in the
exploding China market.
Ostensibly unaware
of these goings-on at a higher pay grade, BIS
management has been actively proselytizing the
China Catch-all and the speculative benefits, the
principal one being the newly minted and untested
"authorization-validated end user" (VEU), which is
supposed to speed certain US exports to certain
US-approved end users in China. But just recently,
it was noted by Chinese authorities that their
country will not permit any Chinese entity either
to apply for or accept the designation as a VEU
without affirmative Chinese government permission,
which is currently not forthcoming.
One
can only wonder why Mancuso desired an 18-month
twilight tour whose principal task will be to
implement this under-thought and overwrought
unilateral trade policy denounced by the Chinese,
the US export community and US trading allies.
Perhaps his former boss, Gates, might provide some
current policy guidance at this late date. Even
Larry Wortzel, former chairman of the generally
sinophobic US-China Economic and Security Review
Commission, recently termed the Catch-all a poorly
crafted and ineffectively unilateral regulation.
Mancuso convincingly stated in his Senate
confirmation hearings that export controls should
be as multilateral as possible to be effective.
That the United States has been unable to achieve
any consensus among its trading partners (the
Wassenaar Arrangement nations) on this issue is an
indication of how benighted an idea the China Rule
really is. Certainly, if the Rule 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. It has been made clear by
BIS management and the administration from the
outset that the China Rule would be rammed down
the throats of industry regardless of the damage
it would do to the US economy or trade relations
with China, or that of US allies. And so it has.
China will clearly continue capitalizing
on this needless trade-policy chaos. The US
taxpayer and the all-important US-China
relationship - which will dominate this century -
will continue to lack intelligent coordination,
consultation and tending by the US government
until US industry communicates its monumental
displeasure to its constituents in the
administration and Congress and belated action is
effected.
But a larger problem looms: the
US has, in effect, been without effective export
legislation since November 1990, leaving it
without a consensus among industry, academia and
government over what should be exported, to whom
and for what reason. Largely as a consequence, the
multilateral consensus forged after World War II
has been irresponsibly left to corrode through
inaction and disengagement during the years of the
current US administration and the
Republican-dominated Congress, where
multilateralism was disfavored and unilateral
swagger held sway.
Whether engagement on
China trade can be effected in the coming months
is problematic, as long as the policy parallax
continues and there is no consistent,
well-informed voice from either the administration
or Congress for pragmatic and multilateral action.
By all measurements in such an environment, the US
will continue to lose valuable ground needlessly
in the China market, the Chinese will benefit from
inaction and have the incentive to create and
compete with US producers of the now-controlled
items, and the world trade environment will
dramatically change to the disadvantage of the
United States.
To paraphrase a venerable
Chinese proverb, "Be careful that the stone you
throw doesn't land on your toes." BIS has now
tossed a big stone, and US industry is scrambling
to cover its feet.
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
2007 Donald Alford Weadon Jr and Carol A
Kalinoski. Used by permission.)
Speaking Freely is an Asia Times
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their say. Please click hereif you are interested in
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