TNAG-2750-FCO40-3965-Most-favoured-nation-status-for-China-Hong-Kong-interests-1993 — Page 237

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MINISTRIES NOT TO GIVE ANYTHING MORE AWAY. ANOTHER EXPLANATION WAS THAT THE CHINESE WERE UNABLE TO TAKE POLICY DECISIONS UNTIL AFTER

THE NPC.

5. I ASKED WHETHER MFN HAD BEEN RAISED. TAYLOR SAID IT HAD. THE AMERICANS HAD ARGUED THAT UNLESS THE CHINESE MOVED ON MARKET ACCESS, CONGRESS WOULD USE THIS AS A REASON TO WITHDRAW SET CONDITIONS FOR MFN. THE CHINESE SEEMED UNMOVED.

6. TAYLOR SAID THAT ANOTHER PROBLEMATIC AREA WAS LAST YEAR'S MOU ON PRISON LABOUR (WHICH SOUGHT TO CONTROL CHINESE EXPORTS TO THE U.S.

THAT WERE MANUFACTURED IN CHINESE PRISONS). THE CHINESE HAD

BEEN DRAGGING THEIR FEET OVER ALLOWING U.S. CUSTOMS INSPECTORS

INTO PRISONS: THE AMERICANS WERE PRESSING HARD. THERE WAS SOME INTEREST IN THIS ON THE HILL: SENATOR HELMS (R) HAD INTRODUCED A BILL THAT WOULD REQUIRE THE TREASURY SECRETARY TO CERTIFY THAT NO

PRISON-MADE IMPORTS WERE ENTERING THE U.S AND TO SET UP A REGISTER OF CHINESE EXPORT AGENCIES, WHICH WOULD ALSO BE REQUIRED

TO MAKE PARALLEL DECLARATIONS. THE IDEA WAS PATENTLY ABSURD. HELMS HAD PROBABLY INTRODUCED THE BILL TO EMBARRASS THE DEMOCRATS.

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FINALLY, TAYLOR SAID THAT, DESPITE THE LACK OF PROGRESS ON THESE AREAS, THE U.S./CHINA TRADE PICTURE WAS NOT ENTIRELY BLEAK. THE CHINESE HAD RECENTLY SIGNED AN IMPORTANT TELECOMMUNICATIONS

AGREEMENT WITH THE AMERICAN FIRM ATT, AND WITH LOUISIANA OIL.

THEY WERE ALSO SENDING A BUYING MISSION TO THE U.S. LATER THIS MONTH WHICH WOULD PLACE SOME LARGE ORDERS. THEY HAD RECENTLY HOSTED A NUMBER OF AMERICAN SENIOR EXECUTIVES ON A VISIT TO CHINA. TAYLOR LAMENTED THAT UNFORTUNATELY, NONE OF THIS GOT MUCH PUBLICITY.

8. ON MFN, AN INTER-AGENCY PAPER HAS RECENTLY BEEN COMPLETED. HOPE TO DISCUSS IT WITH WIEDEMANN (NSC) LATER THIS WEEK.

SIGNED S D PATTISON

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