CONFIDENTIAL
FM HONG KONG
TO PRIORITY FCO
TELNO 450
OF 220933Z MARCH 93
CONFIDENTIAL
HKB 091/1
RECEIVED IN REGISTRY
DESK OFFICER INDEX
REGISTRY
PA
Action Taken
MFN file а
23/3.
AND TO PRIORITY PEKING, WASHINGTON, UKREP JLG HONG KONG
(48)
403374
MDLIAN 2271
CORRECTED VERSION
WASHINGTON PLEASE PASS COPY TO HK ECONOMIC AND TRADE OFFICE
US/CHINA MFN
1. THE SECRETARY FOR TRADE AND INDUSTRY, T H CHAU, VISITED WASHINGTON LAST WEEK TO MEET WITH HIS NEW COUNTERPARTS, KANTOR (USTR) AND BROWN (SECRETARY OF COMMERCE). HE ALSO CALLED ON WEIDEMANN (NSC) AND SENATORS ROBB AND DASCHLE TO MAKE THE HONG KONG ARGUMENTS AGAINST CONDITIONING OR WITHDRAWING CHINA'S MFN. HIS INTERLOCUTORS WERE SYMPATHETIC TO HONG KONG'S CASE BUT WANTED TO PRESSURE CHINA FOR IMPROVEMENTS IN TRADE, HUMAN RIGHTS AND ARMS PROLIFERATION. THE ADMINISTRATION WAS STILL FORMULATING ITS CHINA POLICY. THE SENATORS WERE KEEN TO WORK WITH THE ADMINISTRATION IN DEVISING A MEANS TO SECURE IMPROVEMENTS FROM CHINA WHILE MAINTAINING A CONSTRUCTIVE RELATIONSHIP.
DETAILS
2. CHAU BRIEFED KANTOR ON THE POTENTIAL ECONOMIC DAMAGE TO HONG KONG OF MFN WITHDRAWAL OR CONDITIONING. KANTOR ACKNOWLEDGED HONG KONG'S FREE TRADE STANCE AND VALUE TO US BUSINESS BUT EMPHASISED THE URGENCY OF ADDRESSING CHINA'S WEAPON SALES, HUMAN RIGHTS RECORD AND TRADE PRACTICES, INCLUDING THE FRAUDULENT TRANSHIPMENT AND MISLABELLING OF GOODS DESTINED FOR THE US. CHAU ENCOURAGED HIM TO LOOK FOR ALTERNATIVES TO MFN AS A WAY OF ADDRESSING THESE ISSUES.
3. ON THE URUGUAY ROUND, KANTOR SAID THAT THE US WAS KEEN TO PROVIDE LEADERSHIP, BUT AS PART OF A JOINT VENTURE. THE ADMINISTRATION WOULD SEEK A SUBSTANTIALLY BETTER PACKAGE IN MARKET ACCESS AND PRESS FOR IMPROVEMENTS IN THE DRAFT TEXT ON INTELLECTUAL PROPERTY, ANTI-DUMPING AND SUBSIDIES. HE WAS RELUCTANT TO SEEK FURTHER FAST TRACK AUTHORITY FROM CONGRESS WITHOUT AT LEAST SOME FURTHER COMMITMENT FROM OTHER PARTICIPANTS.
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