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Mini's 091/7
THE CURRENT STATE OF US TRADE RELATIONS WITH CHINA
Auschal
Mr She summary
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Mr Fundy. 8/2
Pan FA
There have been, in recent months, four separate issues in US trade relations with China. These are:-
(a) China's MFN status,
(b) Section 301 action,
(c) Special 301 action, and
(d) Export of Chinese goods made in prisons.
China's MFN's Status with the US Background
2. Under US legislation, the granting of Most Favoured Nation (MFN) import duties to non-market economies, including China, is dependent on the US President certifying and informing Congress on an annual basis that the country concerned does not practise a restrictive emigration policy. China's MFN status expires on 3 July each year.
3.
In 1990, the US Congress, on being informed of the President's certification, sought to introduce new legislation imposing additional conditions, including improvements in human rights as a precondition for the renewal of China's MFN status. A bill attaching conditions and a resolution rescinding MFN status for China were passed by the House of Representatives. However, because of non-action by the US Senate before Congress' adjournment in late October 1990, both the bill and the resolution lapsed.
Present Position
4. On 29 May 1991, President Bush transmitted to Congress his formal decision to extend China's MFN status without conditions for another year (1991/92). On 10 July, the House of Representatives passed a bill attaching conditions for renewal. A resolution disapproving renewal was also passed, but this does not have the force of law. A separate bill attaching conditions for renewal was also passed by the Senate on 23 July, but with a majority significantly less than the two thirds that would be required for any subsequent veto override.
5.
On 26 November 1991, the House passed a bill setting conditions on renewal
renewal of China's MFN status in 1992/93. The bill is a compromise version of the differing bills passed by the House and Senate in 1991. So far the Senate have not taken any action on the compromise bill but could vote on it at any time they deem suitable.
6.
If the compromise bill is eventually passed by the Senate, President Bush is expected to veto it when it is presented to him for enactment. Such veto could however be overridden by a two- thirds majority in both the House and the Senate.