Contradictory Sanctions Policy Blamed for Rising U.S. Trade Deficit with China

Thursday, 21 August 1997

"U.S. foreign policy is riddled with contradictory policies that are surely contributing to the growing trade deficit with China. It is perplexing why our government insists on giving our foreign competitors an undeserved advantage in that market," said Frank Kittredge, Vice Chairman of USA*ENGAGE and President of the National Foreign Trade Council. "As China continues its rapid economic growth, we should be building stronger economic ties to its market of 1.2 billion consumers -- not creating obstacles to trade."

As an example of U.S. inconsistency, Kittredge pointed to the U.S. policy barring companies from participation in the construction of nuclear power facilities in China -- a policy which has resulted in the loss of at least $15.8 billion in potential U.S. exports. At the same time, the United States has just agreed to partially finance two new nuclear power plants in neighboring North Korea.

"Our goal in North Korea is commendable. Through engagement and strong diplomatic efforts, the United States has apparently curtailed the potential for North Korea to use nuclear technology to develop weapons of war. There is no reason we should not adopt the same approach towards China," Kittredge continued. "The U.S. nuclear energy industry has the safest, most environmentally sound technology available. The Chinese have sought to purchase this technology -- but by banning these sales, the United States has forced China to purchase its equipment from the Russia, France and Canada. With U.S. engineers and scientists excluded, our country will not be able to monitor and influence the development of these nuclear projects. As a result, the potential for future environmental problems and nuclear proliferation will likely increase." Kittredge also pointed to the U.S. policy discouraging exports destined for China's Three Gorges dam project. This policy has turned out to be a bonanza for U.S. competitors from Europe and Japan.

"China is in desperate need of clean electrical power, yet the United States is actively working to prevent its development of hydroelectric and nuclear power facilities. This effort has only ensured that non-U.S. firms will help build these massive projects," Kittredge continued. "Active U.S. participation in the development of China's infrastructure would enable us to assert a positive influence, as in North Korea. However, these projects will now be completed without the benefit of U.S. participation."

"It is time to put an end to this misguided policy. Such unilateral sanctions are counterproductive and they are implemented at a great cost to Americans," Kittredge concluded.

USA*ENGAGE is a broad-based coalition representing 632 small and large American businesses, agriculture groups and trade associations. The organization supports American engagement overseas as the best means to promote human rights and American values and interests. Coalition members are undertaking a sustained effort to support greater overseas involvement by the United States at all levels -- political, diplomatic, economic, charitable, religious, educational and cultural -- and to seek alternatives to the use of unilateral economic sanctions.


Contact: Eric Thomas at 202-822-9491