CONFIDENTIAL
ADVANCE COPY
052437 MDADAN 1719
CONFIDENTIAL
FM WASHINGTON
CAMMENDED DISTRIBUTION 25/5)
rec'd 22/5.
TO DESKBY 22090OZ FCO
TELNO 1370
OF 21221OZ MAY 91
INFO IMMEDIATE PEKING, HONG KONG, TOKYO, CANBERRA, ACTOR
MY TELNO 1332: CHINA/US RELATIONS: MFN
SUMMARY
1. DECISION LIKELY EARLY NEXT WEEK. RECOMMENDATION THAT THE PRIME MINISTER WRITE TO PRESIDENT BUSH AS SOON AS POSSIBLE, ADDRESSING THE POSSIBILITY OF CONDITIONALITY.
DETAIL
2. ALTHOUGH PRESIDENT BUSH HAS UNTIL 3 JUNE TO REACH A DECISION ON MFN, OUR STATE AND NSC CONTACTS HAVE TOLD US THAT HE IS LIKELY TO MAKE AN ANNOUNCEMENT SOONER, EVEN AS EARLY AS THE BEGINNING OF NEXT WEEK. IT SEEMS CLEAR FROM HIS OWN COMMENTS (TUR) AND YOUR DISCUSSIONS WITH SENIOR ADMINISTRATION FIGURES LAST WEEK, THAT HE WILL RECOMMEND RENEWAL. BUT, NOTWITHSTANDING SCOWCROFT'S OPTIMISM (MY TELNO 1319), AND KIMMITT'S EXPRESSION OF GRATITUDE ON 20 MAY FOR THE EFICACY OF YOUR DISCUSSIONS LAST
WEEK ON THE HILL, OUR NSC CONTACTS HAVE TOLD US THAT THERE IS STILL CONSIDERABLE CONCERN ABOUT WHETHER THE PRESIDENT CAN
SUSTAIN A VETO IN THE SENATE. ACCORDING TO THEIR LATEST COUNT HE HAS A MAXIMUM OF 32 FIRM VOTES, TWO SHORT OF THE 34 NEEDED TO PREVENT A VETO OVERRIDE.
3. THIS HAS GIVEN RISE TO SPECULATION THAT THE ADMINISTRATION MIGHT BE WILLING TO LOOK AT SOME FORM OF CONDITIONALITY FOR 1992. OUR STATE AND NSC CONTACTS HAVE TOLD US THAT THEY DO NOT FAVOUR CONDITIONALITY, AND WILL BE ADVISING THE PRESIDENT TO AVOID IT. THEY HAVE TOLD US THAT FITZWATER'S REMARKS (TUR) WERE INTENDED PRIMARILY TO MAINTAIN PRESSURE ON CHINA.
BUT THE FINAL DECISION HAS NOT BEEN TAKEN, AND THEY DO NOT EXCLUDE THE POSSIBILITY THAT, FURTHER DOWN THE ROAD, THE ADMINISTRATION MIGHT BE FORCED TO WORK WITH KEY REPUBLICANS ON A LOOSE CONDITIONALITY PACKAGE AS THE ONLY WAY OF GETTING MEN APPROVED.
4.
SEEN FROM HERE IT WOULD BE HELPFUL IF THE PRIME MINISTER'S LETTER TO THE PRESIDENT COULD ISSUE AS SOON AS POSSIBLE. IN ADDITION TO MAKING THE ARGUMENTS FOR CONTINUATION OF MFN ON HONG KONG GROUNDS, THE LETTER MIGHT ADDRESS THE POSSIBILITY OF CONDITIONALITY, POINTING OUT OUR CONCERN THAT TOUGH
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