U.S. Businesses Push Renewal of MFN Trade Status

By Burn, Timothy | The Washington Times (Washington, DC), June 25, 1998 | Go to article overview

U.S. Businesses Push Renewal of MFN Trade Status


Burn, Timothy, The Washington Times (Washington, DC)


As Congress debates whether to renew China's most-favored-nation trade status, the pro-China lobby is spending tens of millions of dollars to convince the United States that China is not a stubborn political foe, but rather the next great capitalist frontier.

The lobbyists are running television commercials, taking out full-page ads in major newspapers, lining up phone banks and prowling the halls of Congress.

Backed with funding from virtually every major U.S. manufacturer from Boeing Co. to Westinghouse Electric Corp., the pro-China lobby is desperately trying to keep the rising chorus of critics from souring Sino-U.S. trade relations even as America's trade deficit with China hit a record $49.8 billion in 1997, a 26 percent increase over 1996.

"We see it as our job to tell Americans and Congress the story of what's at stake with regard to U.S.-China relations and what the consequences would be if MFN were eliminated," said Cal Cohen, president of the Emergency Committee for American Trade, or E-CAT.

Mr. Cohen is also chairman of the Business Coalition for U.S.-China Trade, a coalition of 75 business groups, including E-CAT, pushing for MFN renewal.

"The bottom line for the United States is that ending MFN would put more than 200,000 U.S. jobs in jeopardy, and it would in one stroke remove the foundation for U.S.-China relations," he said.

Most-favored-nation trading status is actually a routine tariff schedule the United States provides to all but a handful of its trading partners. Only countries like Cuba and North Korea, considered rogue nations by the U.S. government, are denied MFN status.

A provision of the Trade Act of 1974, the Jackson-Vanick provision, which originally was directed at the Soviet Union, requires denial of normal trade relations with any non-market economy that restricts free emigration of its citizens.

Without MFN status, China's exports to the United States would be subject to added tariffs that can average 50 percent higher than countries with MFN status.

While the Business Coalition for U.S.-China Trade is leading the charge for renewing MFN status and permanently normalizing trade relations with China, several other major trade groups, including the U.S. Chamber of Commerce and the National Association of Manufacturers, are starting simultaneous pro-China campaigns.

"We are doing the standard inside-the-Beltway stuff, meeting with members and promoting MFN as the cornerstone of U.S.-China relations," said Wally Workman, vice president of international affairs for the U.S. Chamber of Commerce.

The chamber last year spent about $1.5 million on its lobbying effort to ensure renewal of MFN, running ads and enlisting the support of 50,000 members to flood congressional phone lines with calls in favor of opening trade ties with China. This year, Mr. Workman expects to spend at least that amount.

The massive pro-China lobby shows its face every year around June, after the sitting president makes his formal recommendation that MFN status should be granted to China again. President Clinton recommended renewing it on June 3, and Congress has until early August to vote on the recommendation.

The trade status has never been denied to China since it was granted in 1980. But every year a bitter debate ensues in the United States between China's critics and advocates of free trade and more open relations.

While the lobby groups probably will spend the same amount of money they have in years past to make their case, this year's debate has gotten particularly nasty amid twin congressional investigations into possible illegal transfers of missile technology to China and possible illegal campaign donations from the People's Liberation Army of China to the Democratic Party.

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