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bilateral trade deficit is ballooning.
Make no mistake, all of us-- Democrats and Republicans, the Congress and the Administration -- are outraged at China.
None of us differ as to the problems.
the solution.
But we do differ on
I believe that Most Favored Nation or MFN status is the wrong tool to force change in China.
Though the term leads one to think otherwise, MFN is not a special benefit. Rather, it is the minimum trade treatment that we extend to more than 160 nations. The U.S. grants MFN
status to Lybia, Iraq, South Africa, and Syria.
Cutting off or conditioning MFN for China would be a
· severe trade sanction. It is a step that none of our allies are even contemplating.
If MFN were withdrawn, the hand of the hardline marxists
They have always shunned
in Beijing would be strengthened.
ties with the United States,
It is the reformers in China who have sought ties with the West who would be hurt. They would be discredited if the U.S. cut off MFN.
Moreover, as was the case with the Soviet grain embargo imposed in response to the invasion of Afghanistan, it is Americans who bear the brunt of our unilateral trade sanctions. China would surely retaliate against the U.S. since the withdrawal of MFN would automatically impose Smoot-Hawley tariffs on Chinese products.
China
American exports to China can easily be replaced. could simply shift to buying from the Europeans, the Canadians,
Each of these nations would the Japanese, and the Australians.
be more than happy to fill the gap left by the U.S.
lost.
Most of the U.S.' $5 billion in exports to China would be
That means, withdrawal of MFN would cost the jobs of machinists in Washington when China decided to buy from Airbus instead of Boeing. It would cost the jobs of farmers in North Dakota when China decided to purchase wheat from Canada and Australia. The list of jobs lost would likely reach more than 100,000.
What's worse, the very people we are seeking to help Chinese students and peasants would also be hurt.
Fortunately, MFN is not our only tool.
Over the last two months, I have been working with the Administration to develop a package of carefully targeted rifle shot measures to address our concerns with China.
SILBOW ONE TEM