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2. Senator Mitchell said he admired what the Governor had done in

Hong Kong. He also did not want to make the difficult problems in

Hong Kong more difficult. However human rights and trade were

real concerns to him. He had seen a lot of people losing their

jobs as a result of direct competition from China. The US trade

deficit was rocketing upwards.

further as it would put the US in a distinct disadvantage.

This could not

continue any

He

reasons to maintain trade

accepted that there were strong

relationship with China and he did not want to cut off this

relationship. The question was how best to maximise the opportunity

and get as close as possible towards what that US would want

without closing the door with China. He recalled that he had told

President Bush in the past to seek to encourage China to move to

improve in trade, human rights and arms. He agreed that it would

not be in anyone's interest to isolate china but considered that

the US could do better than the last few years. He had met Winston

Mr Lord had told him that he understood

Lord in the afternoon.

the Bill proposed by him would have to be presented to Congress and

hoped that it would not cause harm to Hong Kong and China.

3. The Governor asked Senator Mitchell on how he thought the

conditions on MFN should be in order to have their intended effect.

Senator Mitchell replied that this question should be addressed by

the US Administration. He was working with Representative Pelosi

There were many other members in the House

on credible conditions.

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