TNAG-2750-FCO40-3965-Most-favoured-nation-status-for-China-Hong-Kong-interests-1993 — Page 119

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CONFIDENTIAL

DESK OFFICER INDEX

REGISTRY

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Action Taken

Confidential nfide cial

GOVERNOR'S CALL ON REPRESENTATIVE DAN ROSTENKOWSKI, CHAIRMAN HOUSE WAYS AND MEANS COMMITTEE, MAY 4, WASHINGTON, D.C.

Present: Representative Rostenkowski

Governor

2 aides

Mr.

Mr. Wiggham

Dinham

Mr. Duffy Wall

Mr. Rostenkowski said that he was the Governor's firm ally in the push for MFN renewal this year. He asked the Governor how his meetings with the Administration had gone so far.

The Governor said that he had had good meetings with the President and the Vice President; Lloyd Bentsen; and Mr. Wharton and Mr. Lord. His personal assessment of the President's present thinking was that he was looking to agree a package of conditions on MFN renewal with Congress that would be more than just rhetoric but which at the same time would be achievable by China.

Mr. Rostenkowski said that the Administration had left it very late to come up with a credible policy. He had been advising them for many months to work out a position with Congress. But they had not listened. There was a risk that with the Mitchell and Pelosi bills now out in the open

the issue would get away from the Administration and that they would be unable to control events. He did not wish that to happen.

On the merits of the MFN issue itself, Mr. Rostenkowski said that China represented a major market for the U.S. and it did not make sense to jeopardise this by using MFN as a lever to produce change on non-trade issues such as human rights. There were other mechanisms which could be used to do this.

The Governor agreed that human rights, proliferation and trade abuse issues could and should be addressed in other ways. The main people in China who would be damaged by withdrawing or seriously constraining MFN would be those who were supporting, or benefiting from, economic reform there. The Governor said that his public pitch on MFN had to be to argue for its renewal. He could not let himself be drawn into a discussion of whether certain conditions were more acceptable than others. But he was clear that, if conditions had to be applied, it would be highly preferable if these could be framed in as general and achievable way as possible; if they allowed China a year to prepare for them; and if they did not include any requirement relating to constitutional progress in Hong Kong.

Mr. Rostenkowski said as far as Congress was concerned, their next step was to await a decision from the Administration on how they proposed to proceed. But time was running out. But Mr. Rostenkowski understood that there were many other concerns on the President's plate but there were only 2 or 3 weeks left before the

CONFIDENTIAL