Whatever the outcome of the AK-47 arms smuggling case that erupted in the United States last week, it is ridiculous that the trading relationship between present and potential economic superpowers should be put at risk for the sake of a consignment of automatic rifles. This is not to say that the American authorities should turn a blind eye - on the contrary. But the incident does illustrate the ultimate hollowness of the Most Favoured Nation (MFN) renewal debate currently going through its annual outing in Washington.
The requirement to reaffirm China's MFN privileges on a year-to-year basis is America's stick to wave at Beijing for the carrot of trade. Each summer, those with a stake in China's economy move towards the edge of their seat as the performance proceeds through its familiar acts. The administration in Washington makes it known it wants to renew, and the lobbyists round Capitol Hill feverishly count the votes of Congressmen whose constituents fear their jobs may move to Shanghai or Shenzhen.
The Governor punches home the pro-MFN message in North America, and chambers of commerce draw up estimates of the economic losses which Hong Kong would suffer if China was turned down. Human rights activists lament the de-linking of trade and their particular concern. This year, at least, something unusual happened as the third act got underway, in the form of the arms smuggling case.
The flaw in the drama is that the non-renewal of MFN is, in a literal sense, unreal. The great trading nations of the world simply have too much bound up in continuing to interact with China, and vice-versa, for the US threat to have much substance to it. Politically, as well as economically, isolating China would be a retrograde step. It would also have a negative fall-out in Asia as a whole by creating two trading blocs - one of which did business on the most favourable terms possible with China and another which imposed tariffs against mainland goods.
On America's own evidence, waving sticks at Beijing does not achieve much, whether it is a matter of CD piracy or opening up the services sector. The way ahead is to get China into the World Trade Organisation, with all the necessary requirements which that brings, and to put the annual renewal requirement for MFN to rest once and for all.
That may require some artful politicking by the next administration in Washington, but building a mutually productive long-term trading relationship with China would be a suitable goal for a Clinton second term.
