White House and Business leader Rap Nonproliferation Bill

The Clinton administration and the U.S. Chamber of Commerce, while trying hard to push for an early passage of the China trade legislation through the Senate, have lashed out at a bill floated by some senators calling for punishment of China's arms sale by restricting its access to U.S. capital markets.

The senate bill, formally known as China Nonproliferation Act (S.2645), was sponsored by Senators Fred Thompson (R-Tenn.) and Robert Torricelli (D-N.J.). It stipulates that the U.S. should punish China's arms sale to America's enemies or war-prone regions by barring its fund-raising activities in U.S. markets, and restricting U.S. Export-import Bank financing and credit guarantees for China-related businesses.

It calls for annual assessment of China's nonproliferation and authorizes the U.S. president to carry out the sanctions once relevant accords are found breached.

The White House, however, is strongly opposed to the bill, regarding it as some senators' attempt to set up a new hurdle for an early passage of the legislation granting Permanent Normal Trade Relations (PNTR) to China.

"It is yet another example of an ill-conceived unilateral sanctions bill," said Deputy Treasury Secretary Stuart Eizenstadt in a speech.

"It would diminish our ability to work with China on missile proliferation," and "it would hurt our interest more than China's by undermining confidence in U.S. financial markets," he added.

Meanwhile, a spokesman for the National Security Council said on Monday that such a bill is "unnecessary" and counterproductive.

Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce, also lambasted the Senate bill in an article published by the Washington Post on Monday, stressing that unilateral sanctions not only don't work, but also isolate the United States from its allies and cost American jobs.

Donohue called the Thompson-Torricelli bill "fundamentally flawed," since it would trigger "elaborate and counterproductive unilateral sanctions" against the Chinese government and any person, company or group operating in China, and end up "hurting American farmers, manufacturers and workers."

He wrote that it is unnecessary to have the bill, because it could also "hinder U.S. efforts to prevent proliferation by politicizing the process of determining violations."

The bill could "deal a devastating blow to U.S. exporters" by putting their eighth-largest export market, China, at risk, Donohue wrote, adding that "losing China which the U.S.

Department of Agriculture projects could account for one-third of growth in U.S. farm exports would be a major setback."

"The Thompson-Torricelli bill would end up isolating the United States, not China," Donohue wrote in the article.

"Decades of experience suggest that our European and Asian allies will not support unilateral U.S. sanctions. Consequently, U. S. security will suffer by inciting hostility from our key allies and China against U.S. nonproliferation objectives," he noted.

"Ultimately, the bill would undermine U.S.- Sino relations," he added.

Donohue called on the Senate to reject the Thompson-Torricelli bill, "which is being rushed through Congress without appropriate deliberation."

"If it wants to advance America's national security, the Senate should pass permanent normal trade relations for China, which will bring the Asian giant under the world's rules-based trading system and broaden our engagement and our ability to bring about positive change," he concluded.

Meanwhile, Senate Minority leader Tom Daschle said Monday that he was "alarmed" that no date had been set for a vote on China PNTR this month, and he thought the Republicans were now trying to delay the vote until after the Congress returns from its August recess.

Senate Majority leader Trent Lott, a Republican, said that he supported the PNTR bill but would not decide on a date for a vote at present. He said the major obstacle to setting a date is Democratic objections to taking up the Thompson-Torricelli legislation as "a parallel bill."



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