TNAG-2468-FCO40-3592-Most-favoured-nation-status-for-China-Hong-Kong-interests-1992 — Page 212

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INFO ROUTINE HONG KONG, PEKING, ACTOR

US/CHINA RELATIONS: MFN FOR CHINA

SUMMARY

1.

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RAR MAIS ON/2

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172317

MDLIAN 4521

Me. Dattivan has also commented on

draft time table

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19

Mener

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Kelow

THE PRESIDENT WILL RENEW MFN AT THE END OF THIS MONTH. AS IN PREVIOUS YEARS CONGRESS WILL TRY TO OVERTURN HIS DECISION. MIXED FEELINGS IN THE ADMINISTRATION ABOUT PROSPECTS: THEY HAVE MADE PROGRESS WITH CHINA ON TRADE AND NON-PROLIFERATION, AND HOPE TO DO SO ON HUMAN RIGHTS. BUT THEIR SUPPORT ON MFN IN THE SENATE HAS STEADILY FALLEN. THE HONG KONG ARGUMENTS ARE WELL UNDERSTOOD. WE WILL BE PREPARED TO LOBBY IN ADVANCE OF KEY VOTES AS NECESSARY.

DETAIL

2. AS IN PREVIOUS YEARS THE PRESIDENT NEEDS TO DECIDE BY 3 JUNE WHETHER TO RENEW MFN FOR CHINA. IF HE DOES NOT, MFN WILL EXPIRE ON 3 JULY. OUR ADMINISTRATION CONTACTS TELL US THAT THERE IS NO DOUBT THAT THE PRESIDENT WILL RENEW. DESPITE HIS FRUSTRATION WITH CHINA, HE IS NOT GOING TO BACK DOWN NOW IN THE MIDDLE OF AN ELECTION

CAMPAIGN.

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3. ONCE THE PRESIDENT ANNOUNCES HIS DECISION (PROBABLY SHORTLY BEFORE THE END OF THIS MONTH), CONGRESS WILL CHALLENGE IT, FIRST, BY INTRODUCING A JOINT RESOLUTION OF DISAPPROVAL. THIS MUST BE VOTED ON BEFORE 31 AUGUST AND THE VETO DEBATE IS LIKELY IN EARLY SEPTEMBER.

4. AS IN THE PAST, CONGRESS IS ALSO LIKELY TO INTRODUCE A BILL SETTING CONDITIONS FOR MEN. THIS MIGHT REVOKE MFN IF THE CHINESE MISBEHAVE, OR SET NEW CRITERIA FOR MFN RENEWAL IN 1993. THE DEMOCRATS ARE STILL DEBATING WHETHER THIS YEAR'S BILL SHOULD FOCUS ON NON-PROLIFERATION CRITERIA (WHICH ATTRACT MOST SUPPORT IN THE SENATE), OR INCLUDE TRADE AND HUMAN RIGHTS. THEIR STRATEGY IS UNLIKELY TO FIRM UP UNTIL AFTER THE PRESIDENT ANNOUNCES RENEWAL.

5.

AS IN PREVIOUS YEARS BOTH HOUSE AND SENATE ARE LIKELY TO VOTE TO OPPOSE MFN, AND THE KEY WILL BE WHETHER THE ADMINISTRATION CAN RETAIN ENOUGH SENATE VOTES (34) TO AVOID A VETO

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