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Bush extends favorable trade status for China

By
LORI SANTOS

WASHINGTON -- President Bush, saying economic moves against Beijing would hurt American business and the Chinese people, announced Thursday that he would renew most-favored-nation trading status for China despite its anti-democracy crackdown.

The announcement, which had been predicted by administration officials for several days, came less than two weeks before the first anniversary of the June 4 massacre in Tiananmen Square, where hundreds and perhaps thousands of pro-democracy demonstrators were killed by tank-led troops.

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'This was a difficult decision, weighing our impulse to lash out in outrage that we all feel against a sober assessment of our nation's longterm interests,' Bush told a news conference. 'I concluded that it is in our best interest, and in the interest of the Chinese people, to continue China's trade status.

'Not to do so would hurt the United States,' he said.

Democrats in Congress, angered by Bush's insistence on maintaining high-level contact with the Chinese government and his refusal to take strong steps against it, vowed to overturn his decision and revoke China's status as a preferred trading partner.

Senate Democratic leader George Mitchell of Maine called the president's decision 'profoundly wrong,' and promised, 'We're going to do everything we can to prevent it from taking effect.'

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Congress can pass legislation overturning Bush's decision, but would have to muster a two-thirds vote in the House and Senate to override the president's veto.

House Speaker Thomas Foley, D-Wash., indicated that there was widespread support for revoking China's trade status.

'Across the board, from the most liberal members to the most conservative members of both parties there is a great deal of concern,' Foley said.

Sen. Lloyd Bentsen, D-Texas, chairman of the Senate Finance Committee, promised hearings on the decision and said Bush's 'policy of accommodation toward China has not worked to this point.'

Bush, who served as the first U.S. envoy to China after diplomatic ties were re-established in 1974, angrily dismissed suggestions that he was soft on human rights abuses there.

'What irks me is when some of the people up on the Hill accuse me of being less interested than they are in human rights. I think we're on the right track here,' he said.

'Most important of all, as we mark the anniversary of Tiananmen, we must realize that by maintaining our involvement with China, we will continue to promote the reforms for which the victims of Tiananmen gave their lives.'

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'Taking MFN away,' he said, 'would hurt the Chinese people themselves. I do not want to do that.'

In testimony before a House subcommittee, Richard Solomon, asssistant Secretary of State for East Asia, conceded that 'many' Chinese political prisoners remain in detention, some of them for their participation in last year's peaceful demonstrations.

But, he said, MFN is not a reward for good behavior, but is meant to advance American interests and help those in China who want to avoid a return to Chinese economic isolation.

He said that any punitive action by the United States would undoubtedly result in Chinese retaliation against American imports, and other foreign suppliers are waiting to step in to replace the United States as a seller of wheat and aircraft.

Most-favored-nation status is reserved for the best trading partners of the United States and offers the freest access to U.S. markets. In most products, MFN means the difference between 5 percent to 10 percent duty rates, compared to 40 percent to 50 percent for products not covered by the preferential status.

U.S.-China trade in 1989 added up to $18 billion, with China exporting $12 billion to the United States and the United States exporting $5.8 billion worth of goods.

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After the massacre, Bush suspended military sale and high-level contact with the Beijing government as well as some trade and investment promotion programs. Months later, he was criticized for dispatching two top aides on secret missions to Beijing.

Citing the $6 billion in U.S. exports to China, a resulting loss of American jobs and a billion-dollar impact on Hong Kong, Bush said his decision was also based on his desire to avoid further deterioration in relations with China and not on recent moves by the leadership, which he conceded 'are far from adequate.'

'I don't think this is a reward to Beijing. I think it is very important we keep these commercial contacts,' he said. 'This decision is the proper decision, and it has nothing to do with saying we're condoning human rights excesses.'

The U.S.-China Business Council was pleased. 'We agree that China will eventually return to the policies of reform and openness to new ideas and that continued private commercial contacts will bring that day closer.'

The announcement, foreshadowed by administration officials in advance, came shortly before the one-year anniversary of the Tiananmen Square massacre, where Chinese tanks overran pro-democracy demonstrators in a bloody crackdown.

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'MFN is not a special favor. It is not a concession,' Bush said at a news conference called to announce the sensitive decision. 'It is the basis of everyday trade.'

Bush, roundly criticized for his subdued reaction to the events a year ago, said he made the decision after weighing political, diplomatic and economic factors.

Revoking the special status, he said,which greatly reduces tariffs on Chinese products, would only 'hurt the Chinese people themselves.'

'I do not want to do that,' he said.

more

Bush said he did not base his decision on recent moves by the Chinese leadership, which he conceded 'are far from adequate.'

'Most important of all, as we mark the anniversary of Tiananmen,' Bush said, 'we will continue to promote the reforms for which the people of Tiananmen gave their lives.'

Announcement of Bush's decision was postponed until key members of Congress were notified of the decision, some of whom are strongly critical of Beijing's human rights policies and continued resistance to political reform.

Noting that sanctions he imposed last year remain in place, Bush said the United States should not 'lash out in outrage that we all feel,' but instead keep a 'sober assessment of our nation's long-term best interest.'

Advertisement

'Not to do so would hurt the United States,' he said.

President Bush, saying economic moves against Beijing would hurt American business and the Chinese people, announced Thursday that he would renew most-favored-nation trading status for China despite its human rights record.

The announcement, which had been predicted by administration officials for several days, came less than two weeks before the first anniversary of the June 4 massacre in Tiananmen Square, where hundreds and perhaps thousands of pro-democracy demonstrators were killed by tank-led troops.

'This was a difficult decision, weighing our impulse to lash out in outrage that we all feel against a sober assessment of our nation's long-term interests,' Bush told a news conference. 'I concluded that it is in our best interest, and in the interest of the Chinese people, to continue China's trade status.

'Not to do so would hurt the United States,' he said.

Democrats and some Republicans in Congress, angered by Bush's insistence on maintaining high-level contact with the Chinese government and his refusal to take strong steps against it, vowed to overturn his decision and revoke China's status as a preferred trading partner.

Senate Democratic leader George Mitchell of Maine called the president's decision 'profoundly wrong,' and promised, 'We're going to do everything we can to prevent it from taking effect.'

Advertisement

Congress can pass legislation overturning Bush's decision, but would have to muster a two-thirds vote in the House and Senate to override the president's veto.

House Speaker Thomas Foley, D-Wash., indicated there was widespread support for revoking China's trade status.

'Across the board, from the most liberal members to the most conservative members of both parties there is a great deal of concern,' Foley said.

Sen. Lloyd Bentsen, D-Texas, chairman of the Senate Finance Committee, promised hearings on the decision and said Bush's 'policy of accommodation toward China has not worked to this point.'

Rep. Gerald Solomon, R-N.Y., saying 'There are those of us here in this Congress who respectfully but strongly disagree with that decision,' announced to the House introduction of a bipartisan resolution disapproving the president's action.

Bush, who served as the first U.S. envoy to China after diplomatic ties were re-established in 1974, angrily dismissed suggestions that he was soft on human rights abuses there.

'What irks me is when some of the people up on the Hill accuse me of being less interested than they are in human rights. I think we're on the right track here,' he said.

Advertisement

'Most important of all, as we mark the anniversary of Tiananmen, we must realize that by maintaining our involvement with China, we will continue to promote the reforms for which the victims of Tiananmen gave their lives.'

'Taking MFN away,' he said, 'would hurt the Chinese people themselves. I do not want to do that.'

In testimony before a House subcommittee, Richard Solomon, asssistant Secretary of State for East Asia, conceded that 'many' Chinese political prisoners remain in detention, some of them for their participation in last year's peaceful demonstrations.

But, he said, MFN is not a reward for good behavior, but is meant to advance American interests and help those in China who want to avoid a return to Chinese economic isolation.

He said that any punitive action by the United States would undoubtedly result in Chinese retaliation against American imports, and other foreign suppliers are waiting to step in to replace the United States as a seller of wheat and aircraft.

Most-favored-nation status is reserved for the best trading partners of the United States and offers the freest access to U.S. markets. In most products, MFN means the difference between 5 percent to 10 percent duty rates, compared to 40 percent to 50 percent for products not covered by the preferential status.

Advertisement

U.S.-China trade in 1989 added up to $18 billion, with China exporting $12 billion to the United States and the United States exporting $5.8 billion worth of goods.

After the massacre, Bush suspended military sales and high-level contact with the Beijing government as well as some trade and investment promotion programs. Months later, he was criticized for dispatching two top aides on secret missions to Beijing.

Citing the $6 billion in U.S. exports to China, a resulting loss of American jobs and a billion-dollar impact on Hong Kong, Bush said his decision was also based on his desire to avoid further deterioration in relations with China and not on recent moves by the leadership, which he conceded 'are far from adequate.'

'I don't think this is a reward to Beijing. I think it is very important we keep these commercial contacts,' he said. 'This decision is the proper decision, and it has nothing to do with saying we're condoning human rights excesses.'

The U.S.-China Business Council was pleased. 'We agree that China will eventually return to the policies of reform and openness to new ideas and that continued private commercial contacts will bring that day closer.'

Advertisement

The announcement, foreshadowed by administration officials in advance, came shortly before the one-year anniversary of the Tiananmen Square massacre, where Chinese tanks overran pro-democracy demonstrators in a bloody crackdown.

'MFN is not a special favor. It is not a concession,' Bush said at a news conference called to announce the sensitive decision. 'It is the basis of everyday trade.'

Bush, roundly criticized for his subdued reaction to the events a year ago, said he made the decision after weighing political, diplomatic and economic factors.

Revoking the special status, he said, which greatly reduces tariffs on Chinese products, would only 'hurt the Chinese people themselves.'

'I do not want to do that,' he said.NEWLN:more

Bush said he did not base his decision on recent moves by the Chinese leadership, which he conceded 'are far from adequate.'

'Most important of all, as we mark the anniversary of Tiananmen,' Bush said, 'we will continue to promote the reforms for which the people of Tiananmen gave their lives.'

Announcement of Bush's decision was postponed until key members of Congresswere notified of the decision, some of whom are strongly critical of Beijing's human rights policies and continued resistance to political reform.

Advertisement

Noting that sanctions he imposed last year remain in place, Bush said the United States should not 'lash out in outrage that we all feel,' but instead keep a 'sober assessment of our nation's long-term best interest.'

'Not to do so would hurt the United States,' he said.NEWLN: more

Also noting the trading interests of Hong Kong and Taiwan, Bush lashed out at critics who have contended that his own experiences in China as U.S. envoy have made him take a softer tact toward the communist regime there.

'I don't think this is a reward to Beijing,' Bush declared. 'It is important that we keep these contacts.'

Throughout the past year, Bush has maintained that it is critical to efforts to reform the Chinese government that the huge nation not become isolated.

'What irks me is when some of the people up on the Hill accuse me of being on the wrong track with regard to human rights,' he said. 'This decision is the proper decision.'

Asked what message his action sends to young people in China, many of whom participated in the pro-democracy movement, Bush said, 'It says that economic contacts (are) the best way of keeping the ... reforms going. ... It should send no message other than that economic isolation is bad.'

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Secretary of State James Baker, at a White House briefing Wednesday on the forthcoming U.S.-Soviet summit, pointed to several areas where the Chinese have relaxed control, including: The recent release of 211 political detainees, the lifting of martial law in Tibet and 'a general indication of willingness to begin to take further steps such as that.'

Most-favored-nation trading status is reserved for the best trading partners of the United States and offers the freest access to U.S. markets. In most products, MFN means the difference between 5 percent to 10 percent duty rates, compared to 40 percent to 50 percent for products not covered by the preferential status.

Bush also pointed to the strong pressure from the American business community to extend the trading status for China.

U.S.-China trade in 1989 added up to $18 billion, with China exporting $12 billion to the United States and the United States exporting $5.8 billion worth of goods.

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