TNAG-2468-FCO40-3592-Most-favoured-nation-status-for-China-Hong-Kong-interests-1992 — Page 132

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COMMERCIAL WASH

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23 July 1992

Ms Jan Clarke 012/1b, DTI Bay 760

27/7

wick MFN file

Me Mamer

66-74 Victoria Street Lendon SW1

Dizer Jan

MEN: CHINA

те

ec als. Hong Kong Dept

fle

FCO

British Embassy Washington

3100 Massachusetts Ave N.W.

Washington D.C. 20008-3600

Telephone: (202)

898 4372

Tel:x: RCA 211427 or 216760-WIJI 64224

Facsimile: (202) 898-4255

Мав this oaitz 091/2

コ

1. I reported in my letter of 5 June that Congressman Pease had introduced a bill (HR5318 United States - China Act of 1992) which would condition MFN for China on measurable progress in improving human rights, removing trade barriers and halting illegal weapon sales. If these conditions were not met, MFN would be revoked for goods made in Chinese state-owned factories. There is also a House Joint Resolution (HJ Res 502), introduced by Congressman Solomon, which would simply disallow

MEN.

2. Both were considered on the House floor on Tuesday, ard both passed. HR5318 achieved well over the two-thirds majority necessary to override a veto (339-62), but the more stringent resolution only managed 258-135. You will remember from the fight over HR2212 earlier this year that the House has been able to muster the override votes, but the Senate has not. However, Senate support for President Bus's position is more fragile this time. Senator Baucus has already threatened to withdraw his support if the labour and environmental safeguards in the NAFTA are ir adequate. Senator Mitchell introduced a companion to HR 5313 (S2808) at the beginning of last month, but so far there has been no Senate action.

3. At the Senate Finance Committee's trade hearing on Wednesday, the witness from the Emergency Committee on American Trade warned against cutting off the US's business opportunities with China and giving the EC and Asian countries a huge trading advantage by withdrawing MFN. He had a lot of support from the business representatives present, but Senators were non- committal (Baucus had left by tkis time).

Yours uincerely

Saral Jane

Sarah-Jane Stagg

Trade Policy Officer