Farewell to Jackson-Vanik: The Case for Unconditional MFN Status for the People's Republic of China L. Jay Kuot The Jackson-Vanik Amendment to the 1974 Trade Act linked Most- Favored-Nation("MFN") statusfor "nonmarket economy" countries to the issue of human rights. In recent years, Jackson-Vanik's mandate has spurred contentious debate over the extension of MFN status to the People's Republic of China because of continued reports of human rights abuses in that country. In this Comment, the author argues that U.S. policymakers have failed to ask the threshold question of whether a coun- try's human rights record is a proper criterionfor extending MFN treat- ment. The author advocates the repeal of Jackson-Vanik and the extension of unconditional MFN status as a basis for normalized trade relations between the United States and China. I. INTRODUCTION The Jackson-Vanik Amendment' to the 1974 Trade Act2 established guidelines for U.S. trade relations with Communist nations. The Amendment linked the extension of Most-Favored-Nation (MFN) status for a "nonmarket economy" country to its record on human rights, specifically its emigration practices.' Since its adoption, Jackson-Vanik has mandated an annual review for most Communist nations receiving U.S. MFN status. In recent years, Jackson-Vanik has become a focal point of tension in relations between the United States and China.4 In the aftermath of the t A.B. 1990, Political Science, Stanford University; J.D. 1994, Boalt Hall School of Law, University of California, Berkeley. Copyright © 1994 by Asian Law Journal I would like to thank Professor Bob Berring for his guidance on this piece, and the editors at Asian Law Journal,Eric Lai, Grace Hsu, Lyra Rufino-Maceda, and Jasmin Patel, for their patience, insight, and hard work. Thanks also to the able staff of AL and to its Executive Board members, who have worked so hard to make this journal possible. This Comment is dedicated to my parents, Jenkal and Mary Tan Lee Kuo, whose love for China has been my inspiration. 1. 19 U.S.C. § 2432 (1988). 2. Pub. L. No. 93-618, 88 Stat. 1978 (1975) (codified as amended in scattered sections of 19 U.S.C.). 3. Id. 4. See, e.g., Most-Favored-NationStatus for the People'sRepublic of China: Heat ings Before the Subcomms. on Human Rights and Int'l Orgs., Asian and Pacific Affairs, and on Int'l Economic Policy and Trade of the House Comm. on ForeignAffairs, 101st Cong., 2d Sess. 1 (1990) [hereinafter May 1990 MFN Hearings] (statement of Rep. Stephen Solarz) ("Whether the United States maintains ASIAN LAW JOURVAL [Vol. 1:85 Tiananmen Square incident in June of 1989,1 many human rights advocates criticized the Bush Administration's response as too accommodating and began to call for tougher U.S. measures, including revocation of MFN treat- mentO From 1990 to 1992, China's MFN status hung in a balance between White House efforts to continue MFN treatment and congressional attempts to revoke or place conditions on its extension.8 In May of 1993, with con- gressional approval, President Clinton renewed China's MFN status but attached strict conditions requiring improvements in China's human rights record before he would agree to renew China's MFN status in 1994.9 China's MFN status is one of the most important foreign policy decisions our Government will make this year and certainly the most important with respect to China."); Sino-American Relations: Current Policy Issues, HearingsBefore the Subcomm. on East Asian and PacificAffairs of the Senate Comm. on Foreign Relations, 102d Cong., 1st Sees. 1 (1991) [hereinafter Sino-American Relations Hearings] (statement of Sen. Alan Cranston) (citing M-N status for China as "It]he principal issue before the Congress today" in U.S.-China relations). 5. On June 4, 1989, the Chinese military opened fire upon demonstrators in and around Tiananmen Square in Beijing. For a detailed account of the Tiananmen Square massacre, see Nicholas D. Kristof, TroopsAttack and CrushBeijing Protest; Thousands Fight Back, Scores Are Killed, N.Y. Taws, June 4, 1989, at Al; Daniel Southerland, Troops Roll Through Bejing To Crush Protesters; Hundreds Feared Killed as Chinese Fight Back, WASH. PosT, June 4, 1989, at Al. 6. Although President Bush quickly condemned China's leaders and pledged to halt military sales and suspend visits by military delegations, he was reluctant to impose additional inunediate sanctions. See Robert Pear, PresidentAssails Shootings in China, N.Y. TZWs, June 4, 1989, at A21; Bernard Weinraub, PresidentSpurns OtherSanctions, N.Y. TuvES, June 6,1989, at Al. For a detailed overview of economic sanctions and other measures imposed by the Bush Administration in the wake of the 1989 crackdown, see REPORT ON EcoNoMIc SANCrIoNs AOAINST CHINA: MFSSAE FROM TIm PPEsmmrr oF m UNITED STATEs, H.R. Doc. No. 192, 101st Cong., 2d Seas. 9-19 (1990) (discussing suspension of Overseas Private Investment Corporation services, Trade and Development Program activities, munitions export licensing, crime control and detection instruments equipment shipments, satellite technology transfer, nuclear cooperation, and efforts to liberalize controls of high technology exports). 7. See, e.g., Hobart Rowen, Dollars Before Principle, WASH. POST, May 24, 1990, ait A23; Charles D. Gray, China: Most FavoredPrison, WASH. PosT, July 15, 1990, at B5. 8. In 1990, President Bush notified Congress that he intended to extend China's MN status for one year. See Determination No. 21, 3 C.F.R. 345 (1990 comp.). Congressional Democrats moved quickly to pass a resolution disapproving the extension in light of the Tiananmen massacre a year earlier. See H.R.J. Res. 647, 101st Cong., 2d Seas. (1990). Although Congress never presented the 1990 bill to the President, by 1991 opponents of the President's policy mustered enough votes to pass a bill placing serious restrictions on the renewal of Chinese MFN status. See H.R. 2212, 102d Cong., 2d Seas. (1991). The bill conditioned subsequent renewals upon a clear showing of improvements in the Chinese government's record on human rights, weapons proliferation, and outstanding trade issues. When President Bush vetoed the bill, the House voted to override, see 138 CoNG. REc. Hl 157 (daily ed. Mar. 11, 1992), but the Senate fell 6 votes short of the two-thirds majority needed to override the President's veto. See 138 CoNG. Rac. S3857 (daily ed. Mar. 18, 1992). In 1992, after President Bush once again announced his intent to renew Chinese M'N status, see Determination No. 29,3 C.F.R. 362 (1992 comp.), Congress passed yet another resolution of disapproval. See H.R. 5318, 102d Cong., 2d Sess. (1992). Again, the Senate failed to override the President's veto of this bill. See 138 CONo. Rec. S15957 (daily ed. Oct. 1, 1992). 9. See CONTINUATION OF WAIvER AuTHORY: COMMNauNxIoATON FROM ma PRESImENT OF THE UMrED STArEs, H.R. Do=. No. 97, 103d Cong., IstSeas. 1,4-5 (1993) [hereinafter CoNTINUATION O' WArER Aurmon-rv] (conditioning subsequent renewal of MFN in 1994 to China's abiding by freedom of emigration objectives and an agreement on prison labor, and on progress toward adherence to the Universal Declaration of Human Rights, the release of political prisoners, the respect for 'ibet's religious and cultural heritage, and the permitting of international broadcasts into China). 1994] FAREWELL TO JACKSON-yANIK The Chinese have watched this high-stakes, political seesaw with keen interest and, more recently, vocal protest."0 Given the importance of the MfN issue to bilateral relations, final resolution of the MFN question has become critical to any coherent U.S. policy toward China. The American public's collective outrage over the events in 1989 would seem to require decisive action on the part of the U.S. government. The litany of abuses in China, confirmed by personal accounts11 and by international monitoring organizations such as Asia Watch12 and Amnesty International,13 form strong ammunition for those who would restrict or completely revoke MFN status. Recent proposals to restrict MYFN extension14 have condemned China for the nationwide arrest of political dissidents and participants in the 1989 uprising,15 the abuse and torture of detained persons, 6 China's de facto martial law in 10. See Sheryl WuDunn, China Denounces Terms of Clinton's Trade Deal, N.Y. TMs, May 30, 1993, at A4 (quoting the Chinese government response that "[i]f the U.S. side should insist on its way, it can only seriously impair Sino-U.S. relations and their economic and trade cooperation, which eventually will hurt the vital interests of the United States. Any attempt to impose one's way on others will go nowhere:). 11. See, e.g., Chris Yeung, Torture of Liu Denied by BeUing, S. CENA MoRNING PoST,August 13, 1993, at 7, available in LEXIS, World Library, SChina File (describing smuggled letters from imprisoned dissident student leader Liu Gang stating that he had been tortured by prison staff). 12. See, e.g., ChinaMost-Favored-Nation Status: HearingsBefore the Senate Comm. on Finance, 102d Cong., 1st Sess. 81-86 (1991) [hereinafter June 1991 MFN Hearings] (statement of Holly Burkhalter, Washington Representative, Human Rights Watch). 13. See, e.g., Chris Yeung, Amnesty Hits at Torture Reforms, S. CHmNA MoRNING PosT, April 16, 1993, at 11, available in LEXIS, World Library, SChina File (describing Amnesty International's criticism of China's alleged reforms aimed at curbing widespread torture). 14. See, e.g., H.R. 2212 and H.R. 5318, supra note 8. 15. After the 1989 crackdown, thousands of participants-perhaps as many as 30,000-were allegedly rounded up and detained without charge. See May 1990 MFN Hearings,supra note 4,at 47.