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products of the 1992 Act are of benefit to Hong Kong's interests (or at least to limit any potential damage).
DEVELOPMENTS
6. These requirements are likely to continue while the 1992 Act remains in force, subject to review closer to 1997.
D. INFORMATION WORK
MAIN REQUIREMENTS (IMPORTANT)
7.
Monitoring media comment on our Hong Kong policy, keeping media and opinion-formers informed of developments, and where necessary responding to disobliging comment which the Embassy or posts have picked up locally. This is a valuable service, both to the Department and to HKG interests, and we wish it to continue.
DEVELOPMENTS
8. Continue at least until 1997, and probably beyond.
SPECIFIC POINTS FOR INSPECTORS
9.
There are no specific points not covered above.
BACKGROUND
MFN AND OTHER TRADE ISSUES
1.
MFN enables China's exports to the US to be given the same preferential tariff treatment as a GATT member. Under US law, China's MFN status expires on 3 July each year unless renewed by the US President before 3 June each year. In the past few years MFN has become an annual issue in the US Congress. Since 1990 Congress has sought to either discontinue it, or to impose conditions on its renewal. The continuation of China's MFN by the US is vital to Hong Kong's economic prosperity and stability. More than two thirds of China's exports to the US go through Hong Kong. Non-renewal or conditional renewal of MFN would have serious effects on the Hong Kong economy, and could lead to a loss of up to 60,000 Hong Kong jobs, a halving of GDP growth and a loss to Hong Kong of HK$ 12-16 bn of income.
2. Washington Embassy provide invaluable reporting and assessments throughout the year on the prospects for renewal and the emergence of any threats either to the continuation of MFN or attempts to apply conditions to it. They advise on which arguments may be persuasive (or otherwise) with Congress, and on instructions they take lobbying action with the US Administration and on Capitol Hill. Because other US/China trade issues (eg Section 301, Special 301) have considerable relevance to Hong Kong in much the same way as
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