XN000022-1993-05-12 — Page 15

STI IN MEN MOTION DEBATE

WEDNESDAY, MAY 12, 1993

FOLLOWING IS THE SPEECH BY THE SECRETARY FOR TRADE AND INDUSTRY, MR T H CHAU, IN THE LEGISLATIVE COUNCIL MOTION DEBATE ON THE RENEWAL OF THE MOST-FAVOURED-NATION STATUS FOR CHINA:

MR PRESIDENT,

I WOULD LIKE TO START BY ASSURING MS EMILY LAU THAT I AM SPEAKING IN THIS DEBATE NOT BECAUSE I DO NOT AGREE WITH LORD TENNYSON'S PREFERRED SUBJECT FOR SPRING BUT BECAUSE IT HAPPILY FALLS UPON ME THE SECRETARY FOR TRADE AND INDUSTRY TO RESPOND ON BEHALF OF THE GOVERNMENT. HONOURABLE MEMBERS WHO HAVE SPOKEN IN THIS DEBATE HAVE ALL RECOGNISED THE IMPORTANCE TO OUR ECONOMY OF CHINA'S MOST-FAVOURED- NATION TARIFF STATUS IN THE UNITED STATES. MANY REFERENCES HAVE BEEN MADE TO THE DAMAGE THAT COULD BE CAUSED TO HONG KONG'S ECONOMY IP MFN WERE TO BE TERMINATED. I DO NOT INTEND TO REPEAT ANY OF THIS.

FOR THE PURPOSE OF A RATIONAL DEBATE AND IN ORDER TO APPRECIATE THE PARTICULARLY DIFFICULT SITUATION IN WHICH WE FIND OURSELVES THIS YEAR, 1 FEEL IT IS NECESSARY TO LOOK BACK BRIEFLY AT WHAT HAPPENED IN THE LAST TWO YEARS. WITH THE BENEFIT OF HINDSIGHT, I CAN SAY THAT WE HAD A RELATIVELY EASY TASK IN THE PAST. PRESIDENT BUSH WAS CLEAR AND FIRM IN HIS POLICY OF RENEWING CHINA'S MFN STATUS WITHOUT CONDITIONS. THE DEMOCRAT-CONTROLLED CONGRESS WAS EQUALLY DETERMINED ΤΟ IMPOSE CONDITIONS THROUGH LEGISLATION. THE U.S. ADMINISTRATION'S STRATEGY WAS VERY SIMPLE - THE PRESIDENT WOULD VETO ANY CONDITIONALITY BILL PASSED BY CONGRESS AND SUSTAIN THAT VETO BY SECURING NOT LESS THAN 34 VOTES IN THE SENATE. ALL THAT HONG KONG HAD TO DO WAS TO SUPPORT THE U.S. ADMINISTRATION BY LOBBYING SELECTED SENATORS IN ORDER TO ENSURE THAT NO LESS THAN 34 OF THEM SUPPORTED THE PRESIDENT'S VETO.

AND PRESIDENT BUSH'S STRATEGY WAS SUCCESSFUL IN BOTH 1991 AND 1992. BUT DID WE IN THE HONG KONG GOVERNMENT CLAIM ANY OF THE CREDIT FOR THOSE SUCCESSES? OF COURSE NOT! WE WERE NOT SO NAIVE WE FULLY RECOGNISED THAT THE HONG KONG FACTOR, ALTHOUGH SIGNIFICANT, WAS NOT A DECISIVE ARGUMENT IN THE MFN DEBATE AND THAT THE OUTCOME WOULD BE DICTATED THE UNITED STATES' OWN INTERESTS. AND THAT WAS WHY ONE OF THE MAIN PLANKS OF OUR LOBBYING STRATEGY WAS TO ALLY OURSELVES WITH A COALITION OF U.S. BUSINESSES WHICH HAD HUGE FINANCIAL INTERESTS LINKED то THE MEN ISSUE AND HAD INFINITELY GREATER INFLUENCE THAN HONG KONG WASHINGTON,

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