April 1993
Briefing Paper
SHOULD CHINA BE
A MOST-FAVOURED NATION?
WHAT IS THE USA 'MOST FAVOURED NATION' STATUS?
ΤΙΒΕΤ
SUPPORT Group UK
43 New Oxford St
London
WCIA IBH Tel: 071 210 2493 Fax:071 379 9480
Most Favoured Nation Status (MFN) is a reciprocal trading status which provides a country with the lowest available tariffs on its exports to the USA. Under USA law, countries like China with non-market economies are prohibited from receiving MFN privileges. However, the President has the power to waive these restrictions on a yearly basis.
MFN Status is tied to certain conditions which were introduced by the 1975 Jackson-Vanik Amendment. It is this Amendment which prohibits some countries with non-market economies from receiving MFN privileges. In the case of the former Soviet Union the U.S. enacted the Jackson Vanik Amendment which made it clear that US dollars would not be forthcoming until certain basic international standards of decency were met by the USSR.
THE PRESIDENTAL VETO.
However, the President can waive these restrictions for one year if he certifies that a country is not denying its citizens the right or opportunity to emigrate. In the case of China Presidents Carter, Reagan and Bush all waived the Jackson-Vanik Amendment every year since 1980, despite evidence that the Chinese government does not allow its citizens to freely emigrate.
WHY VETO?
Each President has waived the Amendment believing that extending MFN trading benefits to the PRC will strengthen the reform- minded forces in China and foster openness and democracy. President Bush felt that helping China develop its economy would win friends for the U.S. among the next generation of moderate leaders waiting to take over from the octogenarians.
TSG. UK campaigns for Tibetans' night to choose their OWIT “ future, an end to Chinese occupation of Tibet and the violation of fundamental nights and freedoms. It is independent of all govemments and is Funded by its members