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175535
MDHIAN 0396
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FM WASHINGTON
TO IMMEDIATE FCO
TELNO 371
OF 19151OZ FEBRUARY 93
INFO IMMEDIATE PEKING, HONG KONG, UKREP JLG HONG KONG, ACTOR
MY TELNO 314: U.S./CHINA: MFN
SUMMARY
1. THE ADMINISTRATION BELIEVE THAT UNCONDITIONAL RENEWAL IS UNREALISTIC BECAUSE CLINTON DOES NOT WANT TO GO BACK ON ANY MORE CAMPAIGN PLEDGES. OFFICIALS ARE THEREFORE THINKING OF RENEWAL IN JUNE 1993, WHILE AT THE SAME TIME SETTING CONDITIONS FOR RENEWAL NEXT TIME ROUND (JUNE 1994). THE KEY WILL BE TO TRY TO ENSURE THAT THE CONDITIONS ARE NOT TOO ONEROUS.
DETAIL
2.
IN ADVANCE OF THE PRIME MINISTER'S VISIT NEXT WEEK WE HAVE SPOKEN AGAIN TO NSC, STATE AND USTR ABOUT ADMINISTRATION THINKING ON MFN.
3. ALL SAID THAT UNCONDITIONAL RENEWAL OF MFN WAS UNREALISTIC. THE WHITE HOUSE WAS INCREASINGLY DETERMINED NOT TO HAVE TO GO BACK ON ANY MORE CAMPAIGN PLEDGES. THERE WERE ALSO REAL WORRIES IN
THE ADMINISTRATION AND ON THE HILL ABOUT CHINA'S PERFORMANCE OVER HUMAN RIGHTS, BILATERAL TRADE AND ARMS PROLIFERATION. CHINA'S RECENT RELEASE OF DETAINEES (SEE SEPARATE TELEGRAM) WAS WELCOME, BUT WAS NOT NEARLY ENOUGH TO SATISFY THE HUMAN RIGHTS LOBBY. CHINA'S TRADE IMBALANCE WITH THE U.S. WAS CONTINUING TO GROW. KEY PLAYERS ON THE HILL BELIEVED THAT MFN WAS THE ONLY LEVERAGE THE U.S. HAD OVER CHINA. CONGRESSWOMAN PELOSI WILL RE-INTRODUCE LAST YEAR'S BILL SETTING CONDITIONS FOR MFN SOMETIME IN MARCH.
4.
AT THE SAME TIME, THE ADMINISTRATION ARE WELL AWARE OF THE COMPLEXITIES OF THE ISSUE. MAJOR U.S. BUSINESS INTERESTS HAVE LOBBIED THEM AGAINST WITHDRAWING MEN. THEY UNDERSTAND THE HONG KONG ANGLE. THEY DO NOT WANT TO SPARK A U.S./CHINA TRADE WAR.
5.
THE NSC HAVE TOLD US THAT THEY THOUGHT THAT THE ADMINISTRATION WOULD EVENTUALLY DECIDE TO RENEW MFN THIS YEAR (JUNE), BUT WOULD AT
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