20
12 March 1991
Ms J Clarke
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US/CHINA: TRADE AND MFN
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British Embassy
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Tom Heyerdahl mentioned in the annex to his Round-up of 6 February (not to all) the introduction of a bill, S 38 sponsored by Senator Moynihan, to deny most favoured national status for China. I attach a copy of the bill and of Moynihan's remarks.
2. After last year's stand-off in Congress it was always clear that there would be a further fight this year on the President's waiver of Jackson-Vanik. The key period for that is the ninety days following the notification to Congress for which the deadline is early June. In addition to a disapproval resolution on the waiver, there are likely to be further legislative attempts to disapply MFN or to attach stiff conditions to its continuation. Such bills (S 38) can make progress at any time. The most likely time is the summer when the waiver will provide a focus for the debate.
3. There is not much of substance to report at this early stage except (which is why I am writing) to note a worsening of both the political and the trade atmosphere. The trials and sentencing of dissidents in China have aroused criticism here, though not (yet) anything likely to spill over into emergency legislative or Administration reaction.
4.
On the trade side, tensions have also increased recently. The main causes of this are:
a) a very rapid rise in the bilateral trade deficit, attributed both to lower US exports and higher imports from China. China's is now the third largest bilateral surplus with the United States and could well move to second place, overtaking Taiwan's, this year.
The US cut China's
b)
a continuing dispute over textiles. textile quotas by about a third in February in direct retaliation for alleged circumvention by China of the textile quotas by means of very large scale shipments of mis-labelled clothing channelled through third countries. China is reported again to have protested that it had not engaged in
No comments yet.
Private notes are available after approval.