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These records pertain to China's Most Favored Nation status.
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China MFN [2]
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China MFN [2]
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These records pertain to China's Most Favored Nation status.
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2012-1098-F
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This is not a textual record. This is used as an
administrative marker by the George Bush Presidential
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Record Group/Collection:
George H.W. Bush Presidential Records
Collection/Office of Origin:
Legislative Affairs, White House Office of
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Dyer, James W., Files
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OA/ID Number:
08451
Folder ID Number:
08451-006
Folder Title:
China MFN [2]
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20
11
6
1
LLOYD BENTSEN, TEXAS, CHAIRMAN
DANIEL PATRICK MOYNIHAN, NEW YORK
BOB PACKWOOD. OREGON
MAX BAUCUS, MONTANA
BOB DOLE KANSAS
DAVID L BOREN. OKLAHOMA
WILLIAM V. ROTH. JR. DELAWARE
BILL BRADLEY. NEW JERSEY
JOHN C. DANFORTH. MISSOURI
GEORGE J. MITCHELL. MAINE
JOHN H. CHAFEE, RHODE ISLAND
DAVID PRYOR. ARKANSAS
JOHN HEINZ. PENNSYLVANIA
DONALD W. RIEGLE, JR., MICHIGAN
DAVID DURENBERGER. MINNESOTA
United States Senate
JOHN D. ROCKEFELLER IV. WEST VIRGINIA
WILLIAM L ARMSTRONG. COLORADO
TOM DASCHLE, SOUTH DAKOTA
STEVE SYMMS, IDAHO
COMMITTEE ON FINANCE
JOHN BREAUX, LOUISIANA
WASHINGTON, DC 20510-6200
VANDA 8. McMURTRY, STAFF DIRECTOR AND CHIEF COUNSEL
EDMUND J. MIHALSKI, MINORITY CHIEF OF STAFF
June 19, 1991
Dear Mr. President:
Congress will decide in the next few weeks whether to accept your
recommendation and extend most favored nation trade status to China.
We are writing to share our concerns.
In the debate over the appropriate U.S. policy towards China, one
thing is clear: China's behavior must change. The United States has
serious human rights and foreign policy concerns with China. Every
American remembers the vivid images of the Tiananmen massacre. In the
two years since Tiananmen Square, evidence of democratic reform has
been scant at best. We also have learned of Chinese sales of advanced
missiles to Syria and Pakistan, and of nuclear technology sales to
Algeria. There are credible reports that China has forced political
prisoners to produce goods for export to the U.S.
The United States also has serious economic concerns with China.
The U.S. Trade Representative's annual report on foreign trade
barriers lists ten pages of Chinese barriers. China maintains
restrictions including a preclusive licensing system, discriminatory
testing and certification standards, and outright import bans. China
also fails to protect U.S. intellectual property, resulting in
enormous losses to U.S. producers of films, books, chemicals and
pharmaceuticals. Moreover, the Administration has allowed China to
dictate U.S. policy towards Taiwan, declining to support Taiwan's GATT
application despite clear economic benefits to the U.S.
The United States cannot continue to tolerate Chinese
intransigence. We must tailor active responses to our wide ranging
concerns. But MFN is the wrong tool for the job. Revoking MFN would
not promote human rights in China. Instead, it would punish China's
most progressive regions and Hong Kong.
Revoking MFN also would hurt Americans. China is an important
market for U.S. goods ranging from wheat to airplanes. If MFN were
revoked, China almost certainly would retaliate against U.S. exports.
The Australians, Canadians, Europeans and Japanese are ready to fill
the void. No other country is contemplating cutting off China's MFN
status.
We believe the Administration must be more active in addressing
American concerns with China. You have taken meaningful steps in some
areas. You have moved to protect U.S. intellectual property under
provisions of the 1988 Trade Act. You also have taken steps to
restrict certain technology transfers to China in response to its
missile and nuclear sales. These steps are examples of the types of
actions the U.S. should take.
4546
NATIONAL SECURITY COUNCIL
WASHINGTON D.C. 20506
June 18, 1991
CC., SH
MEMORANDUM FOR PHILIP BRADY
FROM:
WILLIAM F. SITTMANN
SUBJECT:
Talking Points for June 19 Bipartisan
Congressional Meeting
At Tab A are the Points to be Made for the Bipartisan
Congressional meeting with the President on June 19.
Attachment
Tab A
Points to be Made
cc: Fred McClure
TAB-A
POINTS TO BE MADE FOR MEETING WITH
BIPARTISAN CONGRESSIONAL MEETING
--
In my message to the Congress arguing the case for MFN for
China, I told you I want to work with you.
:
Today, I would like to begin with a few points and then get
your views.
:
First, I remain as deeply concerned as anyone with the
continuing human rights abuses in China. I have told
China's leaders in no uncertain terms. We all seek progress
there -- I firmly believe MFN is the strongest tool we have
to bring about long-term positive change in China. Ten
years of trade and openness set in motion the forces we saw
in those protests at Tiananmen.
:
We should not put this tremendous advantage at risk. We
should not give the hardliners in China an opportunity -- by
placing conditions on MFN -- to use conditionality as a
nationalist pretext to turn away from the West.
Our China policy is a package approach. When there are
opportunities to cooperate with China -- in the UN, Korea,
Cambodia -- we will do SO.
Since I announced this year's decision on MFN at Yale, and
because of that decision, the Chinese have responded
positively. They will join the talks in Paris on my Middle
East Arms Control initiative. This will help us tackle the
issue of missile proliferation.
:
Nonetheless, where there are problems in China I will not
kowtow, I will take action. I have already done so on human
rights, trade, and missile proliferation.
2
You know we still have sanctions on OPIC, TDP, international
lending that is not for Basic Human Needs, all military
sales and high-level exchanges.
--
We have designated China a priority country under Special
301 for copyright pirating; we have lifted Chinese textile
visas in retaliation for illegal third-country transfers; we
will soon begin market access talks.
--
The Chinese have responded with a mission that contracted
for over a billion dollars in U.S. exports, and they say
more will follow.
:
We have acted to press China to conform to international
standards on missile transfers. There will be no new
satellite licenses or high-speed computer transfers to China
until it meets those standards. There will be no transfers
of missile technology or equipment to Chinese companies
engaged in proliferation.
--
I am not sitting on my hands. I am prepared to do more when
circumstances require.
--
We also need to step back from the emotions of the moment
and calculate our long-term national interests.
--
We are the only trading nation in the world that would
contemplate removing or conditioning MFN. If we pull back,
we isolate ourselves, not China. We hurt our businesses and
help our competitors.
:
We may not like it, but China is a necessary part of the
solution to some important problems. It has a veto in the
UN Security Council.
3
--
The system that rules China today will not change
dramatically overnight. But that system cannot insulate
itself from inevitable change.
--
I believe the best course is to use economic involvement --
and all the human interchanges that go with it -- to
encourage long-term evolution in China. I think the
announcement on Middle East arms control helps prove the
point.
--
Now I would like to hear your views.
CARD 1 OF 5
POINTS TO BE MADE FOR MEETING WITH
BIPARTISAN CONGRESSIONAL MEETING
:
IN MY MESSAGE TO THE CONGRESS ARGUING THE CASE
FOR MFN FOR CHINA, I TOLD YOU I WANT TO WORK
WITH YOU.
:
TODAY, I WOULD LIKE TO BEGIN WITH A FEW POINTS
AND THEN GET YOUR VIEWS.
:
FIRST, I REMAIN AS DEEPLY CONCERNED AS ANYONE
WITH THE CONTINUING HUMAN RIGHTS ABUSES IN
CHINA. I HAVE TOLD CHINA'S LEADERS IN NO
UNCERTAIN TERMS. WE ALL SEEK PROGRESS THERE -
- I FIRMLY BELIEVE MFN IS THE STRONGEST TOOL
WE HAVE TO BRING ABOUT LONG-TERM POSITIVE
CHANGE IN CHINA. TEN YEARS OF TRADE AND
OPENNESS SET IN MOTION THE FORCES WE SAW IN
THOSE PROTESTS AT TIANANMEN.
:
WE SHOULD NOT PUT THIS TREMENDOUS ADVANTAGE AT
RISK. WE SHOULD NOT GIVE THE HARDLINERS IN
CARD 2 OF 5
CHINA AN OPPORTUNITY -- BY PLACING CONDITIONS
ON MFN -- TO USE CONDITIONALITY AS A
NATIONALIST PRETEXT TO TURN AWAY FROM THE
WEST.
:
OUR CHINA POLICY IS A PACKAGE APPROACH. WHEN
THERE ARE OPPORTUNITIES TO COOPERATE WITH
CHINA -- IN THE UN, KOREA, CAMBODIA -- WE WILL
DO so.
|
SINCE I ANNOUNCED THIS YEAR'S DECISION ON MFN
AT YALE, AND BECAUSE OF THAT DECISION, THE
CHINESE HAVE RESPONDED POSITIVELY. THEY WILL
JOIN THE TALKS IN PARIS ON MY MIDDLE EAST ARMS
CONTROL INITIATIVE. THIS WILL HELP US TACKLE
THE ISSUE OF MISSILE PROLIFERATION.
:
NONETHELESS, WHERE THERE ARE PROBLEMS IN CHINA
I WILL NOT KOWTOW, I WILL TAKE ACTION. I HAVE
ALREADY DONE so ON HUMAN RIGHTS, TRADE, AND
MISSILE PROLIFERATION.
CARD 3 OF 5
--
YOU KNOW WE STILL HAVE SANCTIONS ON OPIC, TDP,
INTERNATIONAL LENDING THAT IS NOT FOR BASIC
HUMAN NEEDS, ALL MILITARY SALES AND HIGH-LEVEL
EXCHANGES.
--
WE HAVE DESIGNATED CHINA A PRIORITY COUNTRY
UNDER SPECIAL 301 FOR COPYRIGHT PIRATING; WE
HAVE LIFTED CHINESE TEXTILE VISAS IN
RETALIATION FOR ILLEGAL THIRD-COUNTRY
TRANSFERS; WE WILL SOON BEGIN MARKET ACCESS
TALKS.
:
THE CHINESE HAVE RESPONDED WITH A MISSION THAT
CONTRACTED FOR OVER A BILLION DOLLARS IN U.S.
EXPORTS, AND THEY SAY MORE WILL FOLLOW.
--
WE HAVE ACTED TO PRESS CHINA TO CONFORM TO
INTERNATIONAL STANDARDS ON MISSILE TRANSFERS.
THERE WILL BE NO NEW SATELLITE LICENSES OR
HIGH-SPEED COMPUTER TRANSFERS TO CHINA UNTIL
IT MEETS THOSE STANDARDS. THERE WILL BE NO
CARD 4 OF 5
TRANSFERS OF MISSILE TECHNOLOGY OR EQUIPMENT
TO CHINESE COMPANIES ENGAGED IN PROLIFERATION.
:
I AM NOT SITTING ON MY HANDS. I AM PREPARED
TO DO MORE WHEN CIRCUMSTANCES REQUIRE.
--
WE ALSO NEED TO STEP BACK FROM THE EMOTIONS OF
THE MOMENT AND CALCULATE OUR LONG-TERM
NATIONAL INTERESTS.
--
WE ARE THE ONLY TRADING NATION IN THE WORLD
THAT WOULD CONTEMPLATE REMOVING OR
CONDITIONING MFN. IF WE PULL BACK, WE ISOLATE
OURSELVES, NOT CHINA. WE HURT OUR BUSINESSES
AND HELP OUR COMPETITORS.
:
WE MAY NOT LIKE IT, BUT CHINA IS A NECESSARY
PART OF THE SOLUTION TO SOME IMPORTANT
PROBLEMS. IT HAS A VETO IN THE UN SECURITY
COUNCIL.
I
THE SYSTEM THAT RULES CHINA TODAY WILL NOT
CHANGE DRAMATICALLY OVERNIGHT. BUT THAT
CARD 5 OF 5
SYSTEM CANNOT INSULATE ITSELF FROM INEVITABLE
CHANGE.
--
I BELIEVE THE BEST COURSE IS TO USE ECONOMIC
INVOLVEMENT AND ALL THE HUMAN INTERCHANGES
THAT GO WITH IT -- TO ENCOURAGE LONG-TERM
EVOLUTION IN CHINA. I THINK THE ANNOUNCEMENT
ON MIDDLE EAST ARMS CONTROL HELPS PROVE THE
POINT.
-- NOW I WOULD LIKE TO HEAR YOUR VIEWS.
Hanry - ok
6/18
June 14, 1991
Please Send FYI
Dear Dean:
Copies Dyer
Thank you for your recent letter to the President
regarding the extension of Most Favored Nation trade
Andres - Thanks
status to the People's Republic of China.
We appreciate being advised of your suggestions on how
the President may be able to gain Congressional
&
approval for this measure. I have taken the liberty of
sharing your note with the President's national security
and foreign policy advisors for their review and
consideration.
Thank you again for your interest in writing.
With best regards,
Sincerely,
Frederick D. McClure
Assistant to the President
for Legislative Affairs
The Honorable Dean A. Gallo
House of Representatives
Washington, D.C. 20515
FDM:JHH:
bcc: w/ copy of inc to NSC - for direct response
bcc: w/ copy of inc to Dept. of State - FYI
245601
Emocure
Congress of the United States
House of Representatives
Dean A. Gallo
Washington, D. C. 20515
Eleventh District
New Jersey
June 12, 1991
Dear Mr. President:
I am writing to express my concern about the
upcoming consideration of further extension of Most
Favored Nation trade status for the People's Republic of
China.
I want to tell you frankly, Mr. President, that I
have not yet decided how I will vote when this issue
comes to the floor of the House. While at this point I
would be unlikely to support a total rejection of
extending MFN, I believe that the mood of the House is
moving in that direction.
In order to forestall such action by the House, I
urge you to consider accepting certain human rights
conditions, such as those suggested by Representative
Pelosi in her bill HR 2212.
I believe that Congress' growing sense of
frustration with the Chinese government would be
tempered by your agreement that future extensions will
not be granted automatically, without regard for China's
human rights record.
Dean
Sincerely,
DEAN A. GALLO
Member of Congress
The President of the United States
The White House
Washington, D.C. 20500
ID# 247222
THE WHITE HOUSE
CORRESPONDENCE TRACKING WORKSHEET
INCOMING
TA005
DATE RECEIVED: JUNE 18, 1991
NAME OF CORRESPONDENT: MR. L. OAKLEY JOHNSON
SUBJECT: ENCLOSES HANK GREENBERG'S OP-ED IN SUPPORT OF
EXTENSION OF MFN FOR CHINA WHICH APPEARED IN
THE NEW YORK TIMES
ACTION
DISPOSITION
ROUTE TO:
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REFERRAL NOTE:
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KEEP THIS WORKSHEET ATTACHED TO THE ORIGINAL INCOMING
LETTER AT ALL TIMES AND SEND COMPLETED RECORD TO RECORDS
MANAGEMENT.
AMERICAN INTERNATIONAL GROUP, INC.
1455 PENNSYLVANIA AVENUE, N. W., SUITE 900
WASHINGTON, D.C. 20004
PHONE: 202 / 783-2452
L. OAKLEY JOHNSON
TELEX: 6491100 AIG WSH
VICE PRESIDENT
FAX: 202 / 737-6811
June 14, 1991
The Honorable John H. Sununu
Chief of Staff to the President
The White House
Washington, D.C. 20500
Dear Governor Sununu:
In the event you might have missed it, you
might be interested in the attached article
that appeared recently in the New York Times
in which our Chairman, Hank Greenberg, argued
for the extension of MFN for China.
Sincerely yours,
THE NEW YORK TIMES, Sunday, June 9, 1991
Resist the Urge to Punish China
By M. R. GREENBERG
EVOKING most-favored-nation tariff treat-
R
ment for China would be shortsighted and
Revoking most-favored-
detrimental to American policy in Asia.
While satisfying understandable desires on the
nation status would
part of many to punish China for its human rights
abuses and other behavior we deplore, such a step
would be counterproductive to critical American
signal that we have given
goals and detrimental to American farmers, man-
ufacturers, consumers and investors.
up on this key country.
Countries that receive most-favored-nation
treatment are not "most favored," but merely get
age change. But their influence will be felt only if
the same tariff rates on their exports to the United
there is genuine interchange.
States as virtually all other countries. In fact, this
Revoking most-favored-nation status would vir-
treatment keeps the wheels of international com-
tually end the dialogue, leading to canceled trade
merce moving in a nondiscriminatory fashion.
orders and fewer investments and commercial
Withdrawing most-favored-nation treatment
opportunities. It would also inflict severe harm on
from a country that has had it for more than 10
Hong Kong, through which flow more than two-
years would be more than a signal of displeasure.
thirds of Chinese exports to the United States.
It would suggest that we have given up on trying to
To ignore the strategic importance of China or
work with China to resolve problems that divide
to pretend it can be manipulated, would be foolish.
us. It would also reinforce the position of hard-
While American investment, technology, exports
liners, postpone the development of more open
and markets have helped many Asian countries
economic policies, stifle emerging economic zones
become economic powerhouses, Japan has recent-
of southern China and impose suffering on the
ly supplanted the United States as the largest
people of China.
Investor and trading partner in most of these
markets. European countries, which automatical-
This is not to say that Americans should remain
ly grant most-favored-nation status to China, are
silent. We should express concerns over human
also increasingly active.
rights issues. We should fight hard for strong
intellectual property safeguards in China and fair
T
HAT is why the United States must stay the
treatment of foreign investment, and we should
course. It is tempting to conclude that the
try .to halt the spread of Chinese missiles and
Bush Administration's pragmatic Chinese
nuclear technology to other countries.
policies have yielded little fruit and that they are
But at the same time, we must encourage the
the wrong policies. But only if we continue the
Chinese to follow policies to open Chinese markets
dialogue and work to expand contacts, trade and
to foreign investment, not close them. And such
investment between our countries will the United
reforms will result only from increased economic,
States have any hope of influencing China and
educational and cultural contacts with the outside
remaining a major economic player in Asia. For
world. My company, founded in China early in this
these reasons, most-fayored-nations treatment
century, has learned, as others have, that you can
must be renewed.
only influence the Chinese through dialogue and
the steady building of relationships. The Chinese
M. R. Greenberg is chairman of American Inter-
alone will determine the pace of their reform.
national Group Inc., an insurance company based
Western governments and businessey can encour-
in New York.
SENT BY:Xerox Telecopier 7020 ; 6-21-91 :10:36AM :
12024561647-
20245662216# 2
THE WHITE HOUSE
WASHINGTON
MEETING WITH MFN COALITION REPRESENTATIVES
JUNE 21, 1991 / THE ROOSEVELT ROOM / 2:00 P.M.
Anderson, Don
President
U.S.-China Business Council
Archey, Bill
Vice President
International Division
U.S. Chamber of Commerce
Beckner, Paul
President
Citizens for a Sound Economy
Berg, Rebecca J.
Director of Federal Public Affairs
Sea-Land Services
Bonnano, Phyllis
Executive Vice President
Warnaco
Boutwell, Wayne
President
Council of Farmer Cooperatives
Cohen, Calman
Executive Director
Emergency Committee for American Trade (ECAT)
Datt, John
Washington Representative
American Farm Bureau Federation
Folsom, R.D.
Vice President
R. Duffy Wall & Associates
Garcia, Ray
Vice President
Rockwell International
Gates, Bruce
Vice President
National Association of Wholesale
Grocers of America
Gavin, Joe
Associate Washington Representative
& Director of Trade Policy
US Council for International Business
SENT BY:Xerox Telecopier 7020 ; 6-21-91 10:37AM ;
12024551647-
2024566221;# 3
Heard, Keith
Executive Vice-President
National Corn Growers Association
Johnson, Mike
Vice President
FMC Corporation
Johnson, Oakley
Vice President
American Insurance Group
Johnson, Mike
Director, Washington Office
McCamish, Martin, Loeffler
Judd, Arden
Vice President
Dresser Industries
Kernan, Tim
Director for Congressional Relations
Fluor Corporation
Mangione, Peter
President
Footwear Distributors and Retailers
McCoy, Steve
President
North American Export Grain Association
Morris, Judge R.K.
Vice President
National Association of Manufacturers
'Flaherty, Dan
Vice President
National Foreign Trade Council
Parker, Dave
President
The Aluminum Association
President
Trade Association Liaison Council
Schlansky, Mark
Vice President
McDonnell Douglas
Schwartz, Elizabeth
Manager, Congressional Affairs
Boeing Corporation
SENT BY:Xerox lelecopier 7020 ; 0-21-91 10.37AM ,
120245010477
2024500221 4
Schwenson, Carl
Executive Vice President
National Association of Wheat Growers
Stawick, Dave
Assistant Vice President
National Corn Growers Association
Van Fleet, Mark
Director of Asia-Pacific Affairs
U.S. Chamber of Commerce
Warker, Peter
Director of International Affairs
TRW, Inc.
20245662215# 2
Telecopier
7020
;
6-18-91
12:19
THOMPSON & COMPANY
RCV
BY:Xerox
U.S. Importersand Exporters Brace
For Ending of China Trade Status
By MRHARL DUCKWORTH
and thus damage long-term American
Wall
Steff Reporter of THE WALL. STREET JOURNAL
competitiveness on the mainland, and per-
NEW YORK-Some U.S. importers are
haps In all of Asia. "In lthe China market.
preparing to make painful adjustments If
you need to make long-term commit-
Street
Congress revokes China's most-favored-na-
ments." says Ed Morrison. publisher of the
tion trading states. But at the same time.
China Trade newsletter in Cambridge,
many U.S. exporters and companies with
Mass. "If we keep going through this ritual
operations in China say they will stick to
every year of trying In beat the Chinese
tournal
their long-term commitments.
over the head. we're undermining our own
If China does lose its MPN status, U.S.
long term economic Interest."
tariffs on imports of many Chinese-made
Routine Convention
goods would Jamp. particularly those on
MFN status Is a routine International
clothing and toys. Levies on those Items
would rise to 65% or more, from current
convention under which one country grants
another the lowest tariff levels available.
levels of 10% or less. foreing many im-
6/17
The U.S. accords the status to more than
porters to spend much time and money
to find new sources. Some clothing im-
100 countries, usually permanently. But un-
porters. unwilling to weather the height-
der the 1974 Trade Act, the MFN status of
ened uncertainty surrounding the current
communist countries must be renewed pf-
annual review of China's trade status.
ther annually or semiannually.
have already done so,
For U.S. Importers of Chinese apparel
U.S. exporters and companies Invested
and toys. the stakes this year are high. For
In China, meanwhile, appear willing to en-
instance. the levy on non-knitted apparel
would rise to 65% from 6.5%. while that on
dure. If necessary. higher tariffs on Chl-
nese goods and the trade retailation from
men's trousers would jump to 90% from
Beljing that removal of MFN status would
7.7%. Last year. the U.S. Imported $3.3 bil.
likely bring. These companies say they are
llon of apparel from China.
looking further ahead, to the time when
"We're talking about a lot of dollars
they believe China's market potential will
here," says Lee Abraham. chairman of As-
become a reality. U.S. exports to China
sociated Merchandising Corp.. a buying
totaled $1.8 billion last year.
syndicate for department-store chains and
"We're In this for the long run." says
discount retailers.
Glenn Stelnman, vice president of Monarch
"Most buyers are very diversified and
Importers, the exclusive U.S. agent for
have contingency plans to shift production
Tsingtao beer for the past 13 years. Adds
to domestic locations or other places where
an official at McDonnell Douglas Corp.,
import quotas have not been met already,"
which with its partner stands to lose a $7
says Commerce Department spokeswoman
Patricia Woodward.
billion airplane contract If the U.S. revokes
If China loses Its MFN status. Mr.
China's MFN status: "We're not going to
turn tall and run."
Abraham says, many buyers will switch to
Last month. President Bush said he
other cheap sources-such as the Philip-
would renew China's trade status. But Con-
pines and Turkey for children's wear, and
Latin America for knitted items. Still.
gress-seeking to sanction Beijing for al-
leged human-rights abuses. unfair trading
making alternative sourcing arrangements
practices and weapons-sales prolifera-
is costly and time consuming.
"It takes better than a year to find
tion-is expected to approve a resolution
by the end of August that would revoke
areas with extra quota. find the right kind
China's MFN privileges or link conditions
of facility that can produce the high qual-
to them. Congressional proponents hope to
ity of goods you need for your customers in
muster enough votes to override an al-
the price bracket you want." says Kay
most-certain vrio by Mr. Bush.
Daines, chairman of the National Retail
In addition to the direct threat to their
Federation. which is spearheading the Job-
current business, many U.S. executives ar.
bying campaign for MFN renewal on be-
half of U.S. retailers.
gue that removal of China's MFN status
would jar the delicate Sino-U.S. rapport
Moves by Toy Importers
Like those In the garment trade. U.S.
importers of stuffed toys are preparing for
a possible jump in tariffs.
"We're very happy with our relation-
ship with China and obviously In favor of
MFN continuation." says Glenn Bozarth.
spokesman for Mattel Corp., which has two
toy-making joint ventures in China's spe-
clal economic zones. "We haven't scaled
down operations and don't plan to, but we
do have contingency plans to alter ship-
ping and production If necessary."
Mattel has sufficient flexibility to avoid
wholesale relocation of Its China factories.
If tariffs rise, Mattel plans to ship more of
its China output to its rebust European
market and shift some production car
marked for the U.S. to factories in Malay
sia and Mexico. Other toy manufacturers
will be looking to Taiwan and Korea for al-
ternative sourcing.
Extended Page
6.1
ware many U.S. importers worry about
maintaining American market share If
China's MFN status Is revoked, U.S. ex.
porters face a different danger: potential
trade retallation by Beijing.
For instance. MFN removal could doom
American Telephone & Telegraph Co.'s
hope of catching up with rivals Alcatel
N.V. of France, NEC Corp. of Japan and
Stemens AG of Germany, which together
control about 60% of China's nascent tele-
communications market. The company,
now planning an aggressive expansion of
its one-factory base in China, expects the
coming year to be decisive in terms of
market penetration.
MFN removal would bring A "severe
destruction of the trade relationship at a
critical juncture for AT&T," says Chris
Padilla, the company's manager of govern-
ment relations.
Wall Street Journal
China's New Software Protection Rules
MONDAY, JUNE 17, 1991
WE SA
Are Called Inadequate by U.S. Official
McDonnell Douglas Sets Pacts to Develop
By JAMES MCGREGOR
for software it now uses. But some pri-
Staff Reporter of THE WALL STREET JOURNAL
vately say that this estimate is vastly in-
BEIJING-China's new computer soft.
liated.
MD-95 Twin-Jet, to Be Built in China
ware protection rules are too riddled with
U.S. officials said Saturday that the
Joopholes to provide adequate protection
software rules showed some progress from
for foreign software makers. according to
early drafts. The rules would give 50 years
By RICK WARTZMAN
the U.S. chief trade negotiator with
of copyright protection-an Initial 25-year
Stall Reporter of THE WALL STREET JOURNAL
mal amount to develop. given that the
China.
period that is renewable for another 25
McDonnell Douglas Corp. said it signed
project is a direct offshoot of the MD-90,
Joseph Massey, assistant U.S. trade
years-while the earlier draft limited pro-
memorandums of understanding with a
whose own development cost only about
representative for China. who ended a five-
tection to 25 years.
& COMPANY-
Chinese aircraft production company. en-
$350 million. "It's really a very modest"
day visit here Saturday. said the major
The Chinese also dropped language re-
gine maker Prait & Whitney and North-
expense, said McDonnell Douglas's chief
problem Is that the regulations appear to
quiring software makers to provide the
west Airlines that are expected to lead to
financial officer. Herbert Lanese.
protect newly invented software but leave
software "source code" when registering
the development of a 105-seat twin-jet.
Northwest, a unit of NWA Inc. of St.
existing software vulnerable to continued
their product in China. Software makers
Speaking at a news conference at the
Paul, Minn., has agreed to evaluate the
piracy.
feared that providing this basic key to the
Paris Air Show, the St. Louis-based com-
new aircraft. The airline currently oper-
"We have a great deal of concern that
software's design would make pirating
pany said the new aircraft will be called
ates 142 McDonnell Douglas DC-9s, the
the protection is not 'up to international
easier. It is still unclear what Information
the MD-95. With preliminary design al-
largest such fleet In the world. Larry
standards," Mr. Massey said. "The protec-
software makers will be required to pro-
ready under way, McDonnell Douglas said,
Kahn, a Northwest vice president. indi-
tion does not extend to already published
vide, however, because registration rules
the aircraft could begin commercial serv-
cated that the MD-95 has some features In
works."
haven't been published.
ice as early as 1995.
common with the DC-9 that could help
On June 13, China's Ministry of Ma-
China also backtracked a bit on an ear-
The plane will be based on the com-
Northwest manage parts provisioning.
chine Buikling and Electronics unvelled
lier plan to offer no protection to software
pany's MD-90 jet, and would he assembled
maintenance, and pllot and maintenance
the country's first regulations for copy-
that Is first published outside of China. In
RCV BY:Xerox Telecopier 7020 6-18-91 THUMPSON
in China. Last April, China's Ministry of
training. "We are optimistic the MD-95
right protection of computer software. The
the new rules. software first published
Aeronautics and Astronauties Industry
could serve well our expanding domestic
40-article measure Is designed to fill In the
overseas will be protected In China If the
agreed to enter final negotiations with
system," he said.
details that were left unspecified in China's
software maker registers the product in
McDonnell Douglas over a co-production
Pratt & Whitney, a division of United
first copyright law, which went into effect
China within 30 days.
contract for MD-90s. The MD-95 program
Technologies Corp. of Hartford, Conn., will
June 1. The soltware rules take effect
This clause, however, leaves all soft-
would be a direct offshoot of that arrange-
supply engines from Its family of JT8D-200
Oct. 1.
ware published anywhere In the world be.
ment. The Chinese already build McDon-
series power plants. Discussions are con-
China is under the gun to quickly Im-
fore Oct. 1. 1991. as fair game for pirating
nell Douglas MD-80 airliners.
tinuing with other engine manufacturers.
prove its protection of software and other
in China. Analysts said that China may
"We have established a good foundation
McDonnell Douglas said.
intellectual property because the U.S. has
have created this huge loophole as a future
with our co-production agreement for MD-
Separately from the air show, Enralair
begun action that could result in retalla-
negotiating play. The Idea Is that by Ini-
80s, and we are confident that It can lead
S.A., a French charter airline, said it
tion. In April, China, along with India and
tially offering U.S. software makers no
to further cooperation with McDonnell
placed firm orders for two long-range ver-
Thalland, was named a "priority country"
protection for existing software. the U.S.
Douglas," Tang Xinoping, executive vice
sions of Boeing Co.'s new jettiner, the 777.
under so-called Special 301 provisions of
will later accept a compromise that pro-
president of China National Aero-Technol-
The order-the first by a European opera-
the 1988 trade act.
tects China from paying royalties on soft-
agy ment. Import/Export Corp., said in a state-
for for the two-engine, wide-body aircraft-
By putting them on the list, the U.S.
ware the country has already pirated. One
was valued at about $300 million.
was announcing that It considers China
scenario is that China will eventually com-
The MD-95 would be the smallest mem-
Also, Canadair Group of Bombardier
and the other two nations to be the world's
promise by giving copyright protection to
ber of the McDonnell Douglas twin-jet fam-
Inc. said II signed a $100 million contract
worst violators of International norms of
new versions of existing software.
ily. It will be 122.5 feet long, or about three
with Boeing to manufacture rear fuselage
protecting copyrights, patents, trade-
Mr. Massey said that while U.S. and
feet longer than the DC-9 Series 30, the air-
sections for the 767 passenger jet. The 31-
marks, trade secrets and other Intellectual
Chinese negotiators are narrowing their
craft It will replace for many carriers.
foot sections are made up of four large
property.
differences on copyrights, there has been
The MD-95 is expected to cost a mini-
components containing more than 3,400
The listing triggers a six-month Investi-
no progress on patents. U.S. chemical and
separate parts.
gation after which the U.S. can Impose Im-
pharmacentical makers maintain that
port duties and other retaliation aimed at
China routinely violates their patents by
obtaining financial compensation for U.S.
copying their products and paying no roy-
companies that lose money due to inade-
alties. China's 1984 patent law protects pro-
quate protection. U.S. software makers
cesses, not products. So If the Chinese
contend they lose more than $400 million
slightly alter a manufacturing process,
annually because China pays no royalties
they copy any product they want.
RCV
BY:Xerox
Telecopier
7020
;
6-18-91
;
12:21
THOMPSON & COMPANY-
20245662216# 4
Chinese Warn U.S.
About Trade Status
Beijing Rejects Conditions, Revocation
By Don Oberdorfer
lowest possible export duties to the
and Lens H. Sun
United States, and about 100 U.S.
Washington Feet Foreign Service
trading partners have been granted
it. President Bush has recommend-
BEIJING, June 15-China is pre-
ed to Congress that the United
pared to cut back sharply on polit-
States continue for another year
ical and economic relations with the
China's MFN status, but there is
United States if Congress with-
strong opposition in Congress and
draws most-favored-nation trade
the final outcome is uncertain.
status or decides to renew it with
Members of Congress have pro-
unacceptable conditions, senior
posed extensive conditions to be
Chinese officials said today.
imposed on the MFN extension re-
Yuan Mu, the senior spokesman
lating to human rights and other
for China's ruling State Council and
issues, and the Bush administration
a close confidant of hard-line Pre-
is under pressure to accept some,
mier Li Peng, and Vice Foreign
During the interview, Yuan, who
Minister Liu Huaqiu both said that
is known throughout China as the
Sino-U.S. relations are at a cross-
articulator of uncompromising lead-
roads. In a 21/4-hour interview, the
two officials outlined in detail the
ership attitudes, gave a long list of
what he said were accommodations
Chinese stand on controversial hu-
man rights, economic and weapons
and other conciliatory steps that
proliferation issues under discus-
China has taken or is taking to meet
recent U.S. demands.
sion with the United States.
"We hope we get MFN without
And Liu, who will be the chief
conditions," said Liu. "If, there
Chinese negotiator on missile pro-
liferation issues when Undersecre-
should be any conditions, we cannot
accept them." He went on to say
tary of State Reginald Bartholemew
that China's reaction to the U.S.
arrives here Sunday for talks, de-
legislation. including retaliatory
nied reports that China has sold
steps, would be affected by the na-
ballistic missiles to Syria. But Liu
ture and severity of any conditions
confirmed the sale of what he called
imposed. This position, while flatly
"short-range missiles" to Pakistan,
opposing the imposition of condi-
another item of serious U.S. con-
tions, appeared to leave room for
cern, and gave no indication that
tacit acceptance of restrictions that
Beijing is willing to cancel or modify
do not seem particularly onerous.
this agreement that "happened in
Liu issued his warning in the face
the past."
of a U.S. estimate that the loss of
Liu, who is in charge of North
most-favored-nation, or MFN, sta-
American affairs, said that "if most-
tus would cost China about three-
favored-nation status is revoked or
fourths of its exports to the United
the United States attaches condi-
States-the total estimated at $20
tions [to its extension], this will ex-
billion this year-because of sharp-
ert a very serious influence on U.S.-
ly increased tariff rates and bring
China relations."
the loss of 2 million to 3 million jobs
He warned that there would be
in an economy that is struggling to
"an unprecedented decline" in
continue to expand.
trade, a "heavy blow" to the 1,300
In addition, American officials
U.S.-Chinese joint ventures and
believe China would have great dif-
wholly owned U.S. companies op-
ficulty selling to others many of the
erating here, "serious restrictions"
items that make up the bulk of its
on all exchanges and contacts and "a
exports to the United States, espe-
major retrogression" in the political
cially inexpensive clothing. foot-
relations between the two nations.
wear and toys. The United States
Liu called MFN status "the cor-
has become vitally important to this
nerstone of our economic and trade
country's economy, last year dis-
relations" and made clear that Chi-
placing Japan for the first time as
na puts great importance on its con-
China's
leading
tinued
RCV
at a Change in U.S. Trade Status Will Harm Bilateral Ties
Asian mainland. It borders on the Soviet
visit here from Richard Schifter, assistant
Other officials also cited Chinese grain
agreeing to such limits, Beijing responded
in and, through land or territorial waters,
secretary of state for buman rights, China
purchases from the United States of about
affirmatively to Bush's invitation only eight
ty every important Asian country.
has officially agreed to consider this topic a
$250 million despite a bumper grain harvest.
days after it was issued late last month.
Telecopier
ugh its relations with other countries
legitimate and even "a very important issue
A U.S. diplomat said be was told by a Chinese
Regarding the missile sale to Pakistan, Liu
: been under stress since the 1989 crack-
in Sino-American relations," said Yuan, de-
official that this was "a political buy" because
said the weapons provided would have a
n and the internal political shifts that fol-
spite its traditional sensitivity on such mat-
"we don't need it"
range of less than 180 miles, below the spe-
7020
ed, China retains worldwide interests and
ters. However, he said the two nations have
Other accommodations cited by Yuan in-
cial limitations agreed to by the United
an important international role as a per-
many disagreements about the substance.
chuded copyright and patent protections in-
States and other nations-but not China-in
ent-and thus veto-wiekling-member
Yuan said China has provided answers to
stituted by China, and the announcement this
the Missile Technology Control Regime. Liu
be U.N. Security Council.
U.S. inquiries about persons arrested in the
week of the country's first regulations on
said there is "no basis" to back up the charge
n a sign of renewed diplomatic activism,
1989 crackdown and other political prison-
copyright protection of computer software.
that the payload of the missiles would exceed
16-81-9
in confirmed that Premier Li will travel
ers, and tried to arrange "lenient" treatment
However, Joseph Massey, assistant U.S. spe-
the internationally agreed limits. However,
ly next month to Egypt, Saudi Arabia, Ku-
for students who were not deemed to be plot-
cial trade representative, said in a news con-
U.S. experts said Chinese sales material on
t, Jordan, Syria and Iran. He said that on
ters against the government.
ference here today that the computer soft-
the missile, known in the West as the M-11,
trip, China "will not be antagonistic" to
However, China has not provided a full
ware regulations are still inadequate. He also
lists the maximum warhead weight at 800
is efforts to arrange a negotiated Middle
accounting of those who died in the crack-
criticized restrictions on imports that re-
kilograms, or 1,760 pounds, exceeding the
12:22
it peace. Li and other senior Chinese lead-
down or were arrested. China also has not
sulted in the loss of $1 billion in U.S. sales to
control regime's limit.
have traveled to the Soviet Union, East-
responded to U.S. requests for a general am-
China last year.
U.S. officials in Washington said intelli-
Europe, North Korea and Southeast Asia
nesty for those convicted for peaceful expres-
Yuan said that China, following U.S. com-
gence spotted one Chinese mobile missile
recent months, though high-level contacts
sion of their views.
plaints, has taken measures to ensure that
launcher in Pakistan, suggesting that deliv-
h the United States remain mimimal.
Washington has been pressing Beijing to
goods made bere by prison labor will no long-
ery of ballistic missiles to fit it would not be
Reacting to a proposal by Sen. Joseph
provide exit visas for the spouses of several
er be exported.
far behind. Because of the presence of the
len (D-Del.) to create a U.S.-funded Ra-
prominent Chinese activists who have taken
In a separate interview, Minister of For-
launcher, Washington curbed licenses for
Free China to report on Chinese domes-
refuge in the United States. Liu said China
eign Trade Li Lanqing said that if the United
U.S. commercial participation in Chinese sat-
THOMPSON &
affairs, Liu said China has objected in
will "adopt a positive attitude" toward these
States withdraws MFN status, China will re-
ellite launches and some sophisticated com-
lomatic exchanges with the administra-
cases. "You can wait and see how we deal
taliate by raising its tariffs on U.S. goods. Li
puter sales to China. U.S. officials said the
a, which recently agreed to a study of the
with these cases," he said.
said "the United States is the major market"
presence of the Chinese missiles in Pakistan
m. "We hope that the U.S. government
# Economic Issues: Yuan cited a recent
and the largest foreign investor in China af-
would trigger more extensive sanctions.
a adopt effective measures to keep it
Chinese purchasing mission in the United
ter Hong Kong.
Chinese officials have taken offense at U.S.
HII becoming a reality," Liu said.
States, which signed contracts for $1.2 bil-
# Arms Proliferation: Yuan cited China's
efforts to restrict Chinese weapons sales,
Regarding the major issues between the
lion in U.S. goods, as a sign of China's com-
agreement to participate in the U.S.-spon-
arguing that the United States and the Soviet
lited States and China, the Chinese offi-
mitment to correcting the growing trade im-
sored international conference in Paris next
Union are much larger arms sellers. "We
als gave these details:
balance in China's favor, which may reach
month on limiting arms sales to the Middle
maintain the higgest arms suppliers should
Human Rights: By accepting a recent
$15 billion this year, U.S. figures show.
East. Though China in the past has resisted
assume responsibilities," Liu said.
2024566221;
Chinese Warn Th
the
CHINA, From A18
Un
is now its largest international market.
nes
Liu said China realizes that the adminis-
Th
tration has an imposing task in persuading
has
enough lawmakers to renew MFN status.
dos
"We work for the best, but we prepare for
low
the worst," said Yuan, spokesman for the
has
Chinese equivalent of the cabinet.
ma
Partly as a hedge against the possible loss
of 1
of the U.S. market, China has been improv-
1
ing its ties with European countries and Ja-
Yu
pan, which have restored normal trade and
ear
political relations in recent months while
wa
the United States has been considering new
the
sanctions in the aftermath of the June 1989
U.
Chinese army crackdown on a student-led
Ea
democracy moment.
en
Referring to bis country's options, Liu
en
said, "In China we have a saying: If there is
in
no light in the east, there is light in the
wit
west; if it is dark in the north, it is quite
bright in the south."
Bis
Liu went on to say that both China and the
dik
United States survived the years between
tic
the Communist revolution of 1949 and Pres-
di]
ident Nixon's opening to China in July 1971,
tic
which included intense antagonism during
pla
the Korean and Vietnam wars. "We can sur-
ca
vive" 2 new period of tension, be said, but
fre
"both sides will be adversely affected."
China, the workd's most populous country
U:
with 1.1 billion people, or about one-fifth of
ci:
the human race, occupies a vast stretch of
.
Extended Page
'C
U.S. May End Opposition to Taiwan Joining GATT
Hills indicated the administration
By Stuart Auerbach
by the Beijing government.
tries that deal with market princi-
Washington Post Staff Writer
is taking the proposal seriously.
Both Taiwan and China are seek-
ples
you send a signal to China"
"This is something the administra-
ing to join GATT, and Deputy Secre-
that it could join GATT if it made
The Bush administration is con-
tion is going to have to study.
I
tary of State Lawrence Eagleburger
the same progress in opening its
sidering withdrawing its opposition
am very willing to explore the notion
told a House subcommittee Wednes-
economy that it was making two
to Taiwan joining the General
and to talk to Congress," she said.
day that China would be infuriated if
years ago, Hills said.
Agreement on Tariffs and Trade as
There is strong bipartisan opposi-
Taiwan were allowed to join GATT
China was close to winning ap-
part of a deal to win Congress's sup-
first.
tion in Congress to administration
proval to join GATT two years ago,
port for continuing China's most-fa-
efforts to continue China's most-fa-
Economically, said Hills, the Unit-
but that move was blocked for politi-
vored-nation trade benefits, U.S.
vored-nation status, which allows
ed States would gain if Taiwan joins
Trade Representative Carla Hills
GATT since it would be bound by
cal reasons after the Beijing govern-
Beijing to ship products to the Unit-
said yesterday.
the trade body's rules. Tarwan is the
ment used the army to kill student
ed States at the lowest possible tariff
United States' sixth-largest trading
demonstrators.
The deal to bring Taiwan into the
rate.
partner and has been liberalizing its
As China backed away from the
GATT system. which governs the
By supporting Taiwan's bid to join
economy.
market-opening steps it started in
bulk of world trade, is part of a se-
GATT as part of the fight to main-
Further, Taiwan would be willing
the late 1980s, its bid to join GATT
ries of conditions proposed by Sen.
tain China's trade status, the admin-
to join GATT as a developed nation,
was blocked because it didn't meet
Max S. Baucus (D-Mont.) and pre-
istration would both send a strong
meaning it would voluntarily forgo
the necessary free-trade criteria.
sented to senior administration offi-
signal of U.S. dissatisfaction with
some special benefits that less-de-
Meanwhile, Taiwan was kept out
cials by Senate Republican Leader
China's trade and economic policies
veloped countries enjoy.
of the world trade body, despite its
Robert Dole of Kansas at a White
and defuse congressional anger over
"By not opposing their sitting
economic power, because of concern
House meeting Thursday.
what is seen as political repression
down at the table of civilized coun-
over angering Beijing.
06/05/91
20:20
SENATE TELECOMM DEPT
P00
June 5, 1991
MENORANDUM
TO:
JIM DYER
FROM:
NINA OVIEDO
THROUGH: SHEILA BURKE
COPY TO: AL LEHN
SUBJECT: CHINA MFN -- WHITE HOUSE VISITS
As we discussed, you may want to consider the following
Senators (Democrate) for visits with President Bush. I
understand that each of these members either have strong
constituent interest in MFN or have not made a decision. The
list was developed by a key lobbyist working with the Chinese.
Burdick
Exon
Bingaman
Robb
Johnston
Adams
Breaux
Sanford
Boren
Lieberman
Daschle
Kerry
United States Senate
Office of the Majority Keaber
Mashington, BC 20510-7010
June 24, 1991
Dear Colleague:
I intend shortly to introduce the attached modifying
legislation to my previously filed bill S. 1084, extending
renewal of most-favored-nation tariff. treatment for the People's
Republic of China until July 1992, provided certain conditions
have been met during the intervening year.
This legislation extends most-favored-nation tariff
treatment to the People's Republic through July 3, 1992. Most-
favored-nation tariff treatment may not be renewed after that
date unless the President reports in his waiver request for 1992
renewal that the People's Republic of China has:
-- accounted for those citizens detained, accused, or
sentenced because of the nonviolent expression of their
political beliefs;
-- released those citizens imprisoned for such expression;
-- ceased exporting products to the United States produced
by forced labor; and,
-- has made significant progress in preventing violations
of internationally recognized human rights, as well as
adopting as national policy limits and controls on
nuclear, chemical, and biological arms proliferation.
If at any time after the date of enactment of the
legislation the President determines that the Feople's Republic
of China has transferred M-9 or M-11 ballistic missiles to Syria,
Iran, or Pakistan, he is required to immediately terminate most-
Republic. favored-nation tariff treatment for products of the People's
PAGE.002
NIW USTR FROM 98:81 16. 25 NOS
It is my hope that this modification of my previously filed
bill will accommodate the concerns of all my colleagues in order
that a consensus may be reached permitting enactment of
legislation which will promote the long-term best interests of
our nation, while addressing the serious deficiencies in human
rights, unfair trade practices, and arms sales, existing in our
bilateral relations with the People's Republic of China.
If you are interested in supporting this legislation, please
contact Ed King or Wendy Deker at 4-1430.
Sincerely
Sop dirticult
George J. Mitchell
2
E00 PAGE
JUN 25 '91 13:37 FROM USTR MTN
CRA91257
SLACE
102D CONGRESS
1ST SESSION
S.
IN THE SENATE OF THE UNITED STATES
Mr. MITCHELL (for himself and
) introduced the following bill; which was read twice
and referred to the Committee on
A
BILL
To extend to the People's Republic of China renewal of
most-favored-nation treatment until 1992 provided certain
conditions are met
1
Be is enacted by the Senate and House of Representa-
2 tives of the United States of America in Congress assem-
3 bled,
4 SECTION 1. SHORT TTTLE.
5
This Act may be cited as the "United States-China
6 Act of 1991".
7 SEC. 2. FINDINGS AND POLICY.
8
(a) FINDINGS.-The Congress makes the following
9 findings:
PAGE 004
FROM USTR MTN
13:37 16. 25 NOS
S.L.C.
CRASL257
2
(1) The Chinese people have provided a dramat-
to demonstration of their desire for democratic free-
3
doms. Thousands of courageous Chinese students
4
and workers, men and women, demonstrated on June
5
4, 1989, that they were willing to die, or face impris-
6
onment or exile, in pursuit of democratic self-deter-
7
mination and human rights.
8
(2) The Government of the People's Republic of
9
China, which is a member of the United Nations and
10
obligated to uphold the United Nations Charter and
11
Universal Declaration of Human Rights, continues to
12
commit violations of internationally recognized
13
human rights, including-
14
(A) torture or other cruel, inhuman, or de-
15
grading treatment or punishment;
16
(B) prolonged detention without charges
17
and trials, and sentencing of members of the
18
pro-democracy movement for peaceful advocacy
19
of democracy;
20
(C) use of forced labor of prisoners to
21
produce cheap products for export to countries,
22
including the United States, in violation of
23
international labor treaties and United States
24
law:
=>
CRA91.257
SLC
3
1
(D) abduction and clandestine detention of
2
individuals; and
3
(E) other flagrant denials of basic human
4
rights.
5
(3) The Government of the People's Republic of
6
China has denied Chinese citizens who support the
7
pro-democracy movement and others the right of
8
free, unimpeded emigration.
9
(4) The Government of the People's Republic of
10
China has restricted the number of students permit-
11
ted to study abroad and has required college students
12
to attend military indoctrination courses, to work 5
13
years after graduation, and to pay large sums of
14
money before being eligible to apply for study out-
15
side China.
16
(5) The Government of the People's Republic of
17
China continues to violate the fundamental human
18
rights of the people of Tibet and uses the People's
19
Liberation Army and police forces to intimidate and
20
repress Tibetan and Chinese citizens peacefully dem-
21
onstrating for democratic change and religious free-
22
dom.
23
(6) The Government of the People's Republic of
24
China has not demonstrated its willingness and in-
25
tention to participate as a full and responsible party
THE
FROM USTR MTN
68:31 16. 25 NNS
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CRA91.257
4
1
in good faith efforts to control the proliferation of
2
dangerous military technology and weapons, includ-
3
ing biological, chemical, and nuclear weapons tech-
4
nologies.
5
(7) The Government of the People's Republic of
6
China continues clandestinely to supply arms and
7
military assistance to the genocidal Khmer Rouge
8
forces fighting in Cambodia.
9
(8) The Government of the People's Republic of
10
China has interfered with the rights of the people of
11
Hong Kong to exercise self-determination in their
12
political, cultural, and economic activities.
13
(9) The President of the United States has sus-
14
pended all government-to-government sales and
15
commercial exports of weapons to China and issued
16
an Executive order to treat sympathetically requests
17
by Chinese students in the United States to extend
18
their stay.
19
(b) POLICY.-It is the sense of the Congress that-
20
(1) the additional existing sanctions being ap-
21
plied against the People's Republic of China on the
22
date of the enactment of this Act in the areas of
23
technology exports and international monetary loans
24
should be continued and strictly enforced; and
200 PAGE
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CRA91.257
5
1
(2) the United States Government should con-
2
sult with members of the United States business
3
community operating or investing in the People's
4
Republic of China in order to discuss the establish-
5
ment of guidelines for corporate activity in that
6
country.
7 SEC. 3. PROVISIONS FOR RENEWAL OF MOST-FAVORED-NATION
8
STATUS.
9
Notwithstanding any other provision of law, the Peo-
10 ple's Republic of China may not be provided nondiscrim-
11 inatory (most-favored-nation) trade treatment for the 12-
12 month period beginning July 3, 1992, under any provision
13 of title IV of the Trade Act of 1974 (19 U.S.C. 2431 et
14 seq.), unless the President reports in the document required
15 to be submitted by section 402(d)(1)(B) of such Act that
16 the Government of the People's Republic of China-
17
(1) has accounted for those citizens detained,
18
accused, or sentenced as a result of the nonviolent
19
expression of their political beliefs;
20
(2) has released those citizens who were impris-
21
oned after such detention, accusation, or sentencing;
22
(3) has ceased exporting products to the United
23
States manufactured, wholly or in part, by convict,
24
forced, or indentured labor under penal sanctions;
800 PAGE
FROM USTR MTN
04:40 16. 25 NOS
CRA91.257
SJ.C.
6
1
(4) has ceased supplying arms and military as-
2
sistance to the Khmer Rouge:
3
(5) has made significant progress in-
4
(A) fulfilling its commitment to engage in
5
high-level discussions on human rights issues,
6
(B) taking appropriate action to prevent
7
gross violations of internationally recognized
8
human rights and fundamental freedoms in the
9
People's Republic of China and Tibet, including
10
cessation of religious persecution and removal
11
of restrictions on freedom of the press and
12
Voice of America broadcasts,
13
(C) terminating intimidation and harass-
14
ment of Chinese citizens in the United States,
15
(D) ensuring access of international human
16
rights monitoring groups to prisoners, trials, and
17
places of detention,
18
(E) providing adequate: protection of
19
United States patents, copyrights, and other in-
20
tellectual property rights,
21
(F) providing American exporters fair
22
access to Chinese markets, including lowering
23
tariffs, removing nontariff barriers, and increas-
24
ing the purchase of United States goods and
25
services, and
600 PAGE
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13:41 16. 25 NNS
CRA91257
7
1
(G) adopting a national policy which ad-
2
heres to and ceasing activities inconsistent
3
with-
4
(i) the limitations and controls con-
5
tained in the Missile Technology Control
6
Regime (MTCR),
7
(ii) the standards and guidelines set by
8
the Nuclear Suppliers Group, and
9
(iii) the standards and guidelines set
10
by the Australia Group on chemical and bi-
11
ological arms proliferation: and
12
(6) is adhering to the Joint Declaration on Hong
13
Kong that was entered into between the United
14
Kingdom and the People's Republic of China.
15 SEC. 4. IMMEDIATE TERMINATION OF MOST-FAVORED-NATION
16
STATUS.
17
(a) IN GENERAL-Not later than the day which is 15
18 days after the date of the enactment of this Act, products
19 of the People's Republic of China shall be denied nondis-
20 criminatory (most-favored-nation) trade treatment, unless
21 the President certifies to the Congress in writing that the
22 People's Republic of China has not transferred to Syria or
23 Iran ballistic missiles or missile launchers for the weapon
24 systems known as the M-9 or the M-11, and has not trans-
25 ferred to Pakistan ballistic missiles or missile launchers for
010 PAGE
FROM USTR MTN
13:41 16, 25 NNS
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SLC
8
1 the weapon system known as the M-9, or ballistic missiles
2 for the weapon system known as the M-11.
3
(b) SUBSEQUENT TRANSFERS OF WEAPONS.-If. at any
4 time after the date of enactment of this Act, the President
5 determines that any transfer described in subsection (a) has
6 occurred, then the President shall immediately-
7
(1) notify the Congress of such transfer, and
8
(2) terminate nondiscriminatory (most-favored-
9
nation) trade treatment for the products of the Peo-
10
ple's Republic of China.
11 SEC. 5. DEFINITIONS.
12
For the purposes of this Act:
13
(1) The term "gross violations of internationally
14
recognized human rights" includes torture, cruel, in-
15
human, or degrading treatment or punishment, pro-
16
longed detention without charges and trial, causing
17
the disappearance of persons by the abduction and
18
clandestine detention of those persons, secret judicial
19
proceedings, and other flagrant denial of the right to
20
life, liberty, or the security of any person.
21
(2) The terms "detained" and "imprisoned"
22
include incarceration in prisons, jails, labor reform
23
camps, labor reeducation camps, and local police de-
24
tention centers.
110 PAGE
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13:42 16, 25 NOT
CRA91.257
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9
1
(3) The term "acts of intimidation and harass-
2
ment" means actions taken by the Government of
3
the People's Republic of China that are intended to
4
deter or interfere with, or to be in retaliation for, the
5
nonviolent expression of political beliefs by Chinese
6
citizens within the United States.
7
(4) The term "significant progress" means spe-
8
cific actions taken to achieve the objectives stated in
9
subparagraphs (A) through (G) of section 3(5).
10
(5) The term "forced labor" has the meaning
11
given to such term by section 307 of the Tariff Act
12
of 1930 (19 U.S.C. 1307).
13
(6) The term "Missile Technology Control
14
Regime" or "MTCR" means the agreement, as
15
amended between the United States, the United
16
Kingdom, the Federal Republic of Germany, France,
17
Italy, Canada, and Japan, announced on April 16,
18
1987, to restrict sensitive missile-relevant transfers
19
based on an annex of missile equipment and technol-
20
ogy.
THE WHITE HOUSE
WASHINGTON
91 JUN 24 PM 6: 39
June 24, 1991
MEMORANDUM FOR THE PRESIDENT
FROM:
ROGER B. PORTER
RBP
SUBJECT:
The Crime Bill
On Thursday, June 20, the Senate began floor consideration
of the violent crime control bill, using the Biden bill, S.
1241, as the vehicle.
By a vote of 55 to 41, the Senate agreed to a Bob Graham
amendment to strike the "Racial Justice Act" from the Biden
bill. The "Racial Justice Act" was Kennedy's proposal that
would have invalidated virtually all state death penalty laws.
The Senate rejected, by a vote of 56 to 40, a Thurmond
amendment in the nature of a substitute. The Thurmond
substitute was the Administration's bill with three changes.
First, the provision related to the admissibility of illegally
seized firearms was deleted. Second, the provision related to
closed hearings on deportation of suspected terrorists was
deleted. And third, the authorizations in the Biden bill,
approximately $3.2 billion, were added to the Administration's
language.
Two Democrats, Hollings and Shelby, voted for the
Administration's substitute. Four Republicans, Chafee,
Durenburger, Jeffords, and Rudman, voted against the
Administration's substitute. Senator Simpson did not vote.
Last Friday, the Senate debated a Thurmond amendment to
strike Biden's exclusionary rule provisions and insert the
Administration's exclusionary rule provisions with the
exception of the provision related to the admissibility of
firearms. A vote is scheduled for 11:30 on Tuesday, June 25.
Today, Senators Thurmond and Biden offered a bipartisan
compromise on the death penalty similar to the provisions that
passed the Senate last year. Four other death penalty
amendments will be offered to the Thurmond-Biden compromise:
an Inouye amendment relating to the death penalty on
Indian reservations;
a Biden amendment relating to drug kingpins where no death
has occurred;
-2-
a Simon amendment relating to life imprisonment without
parole in lieu of the death penalty; and,
a Hatfield amendment relating to the televising of
executions.
Other key votes will include:
the Administration's habeas corpus provisions; and
an amendment to strike the language in the bill related to
the DeConcini ban on the sale of certain semi-automatic
weapons.
Also on the gun front, discussions are underway between
proponents of a modified Brady bill and Senator Dole, among
others. Options include:
shortening the 7-day waiting period;
sunsetting the waiting period;
preempting state waiting period laws;
a firm deadline for implementing the point of
purchase identification system; and
up to $100 million in funding to assist the states in
upgrading their criminal records.
The likelihood of an agreement containing any or all of
these options is unclear. It appears that any amendment
relating to the Brady bill will be among the last considered by
the Senate.
Dyer
COMMITTEES
WILLIAM V. ROTH. JR
GOVERNMENTAL AFFAIRS
DELAWARE
FINANCE
104 HART SENATE OFFICE BUILDING
BANKING. HOUSING AND URBAN AFFAIRS
TELEPHONE 202-224-7441
United States Senate
JOINT ECONOMIC COMMITTEE
WASHINGTON. DC 205 10-0801
June 21, 1991
The President
The White House
Washington, D.C. 20500
Dear Mr. President:
As cosponsors of S. Res. 116, we are writing to
urge you to support the application of Taiwan to become a
Contracting Party to the General Agreement on Tariffs and
Trade (GATT).
We are troubled by the fact that the GATT has
taken no action on Taiwan's accession request since it was
initiated in January 1990, despite the overwhelming merits
of Taiwan's GATT application and standard GATT Council
practice of promptly placing accession requests on its
agenda. Although the application may be politically
sensitive, it should be based on economic and trade
considerations, not political ones. In that regard, it is
noteworthy that national sovereignty is not a prerequisite
to joining the GATT, which Taiwan has recognized by
applying as a separate customs territory. Allowing a non-
GATT member, namely the People's Republic of China, to
determine the terms and timing of another territory's
entry into the GATT is unacceptable.
Taiwan has made remarkable economic strides, and
is now our sixth largest trading partner and the 13th
largest trading entity worldwide. Taiwan is also the
largest market-based economy still outside of the GATT.
Clearly, such a key U.S. trading partner and major
participant in the world economy should not remain
isolated from the world trade community by being kept
outside of the world's premier trade regime. The
anticipated successful conclusion to the Uruguay Round
makes the case for Taiwan's GATT membership all the more
compelling for It would further liberalize Taiwan's
economy in areas of critical importance to the United
States.
The President
June 21, 1991
Page 2
We believe that without the leadership of the
United States, Taiwan's GATT application will remain
dormant. We strongly urge you to move in this direction
by demonstrating support for the accession of Taiwan to
the GATT.
Sincerely,
Buie Ril
Thomas VI. Daschle
William V. Roth, Jr.
Day Rahyelle
Jh McCain
John D. Rockefeller, IV
John McCain
Sain Daniel K. Inouye
Steve Symnno
Steven D. Symms
Joseph J I. Lieberman
Bal Dale
Robert Dole
Thank s.
Frank H. Mufkowski
Paul Simon
Howell Howell Heflin Hellus
use That
Slade Gorton
06/25/91 17:32
097
DOOR
$202 224 2805
SEN. RUIN
06/25/91 18:03
The President
June 21, 1991
Page 3
Inch Darlote
David L. Boren
John C. Danforth
Thad Thad Cochran Column
Walcom Malcolm Wallop Wallop
Larry Larry Pressler Presler
Dan Coats
Wich Wyche Fowler, Jr.
Bob Pachwood
Bob Packwood
Bob Smith
James Exon
Bob Smith
Chin. D.N.
Came made
Connie Mack
Christopher J. Dodd
J. Bennett Johns ton Dave Durenberge. Damingu
Nich Lugar Chuck Grasley
Charles E. Grassley
Richard G. Lugar
06/25/91 18:04 202 224 2805
SEN.ROTH-D.C.
1
DOS LEGIS AFFAIR
005
The President
June 21, 1991
Page 4
alan J Diton
Rill William S. Cohen
Front Lott
Trent Lott
06/25/91
17:26
6202 647 5095
DUS LEGIS APPAIR
WHLEV
E/J 002/ 000
06/25/91
18:02
202 224 2805
SEN.ROTH-D.C.
DOS LEGIS AFFAIR
002
COMMITTEES
WILLIAM V. ROTH. JR
GOVERNMENTAL AFFAIRS
DELAWARE
FINANCE
104 HART SENATE OFFICE BUILDING
BANKING. HOUSING AND URSAN AFFAIRS
TELEPHONE: 202-224-7441
JOINT ECONOMIC COMMITTEE
United States Senate
WASHINGTON. DC 205 10-0801
June 21, 1991
The President
The White House
Washington, D.C. 20500
Dear Mr. President:
As cosponsors of S. Res. 116, we are writing to
urge you to support the application of Taiwan to become a
Contracting Party to the General Agreement on Tariffs and
Trade (GATT).
We are troubled by the fact that the GATT has
taken no action on Taiwan's accession request since it was
initiated in January 1990, despite the overwhelming merits
of Taiwan's GATT application and standard GATT Council
practice of promptly placing accession requests on its
agenda. Although the application may be politically
sensitive, it should be based on economic and trade
considerations, not political ones. In that regard, it is
noteworthy that national sovereignty is not a prerequisite
to joining the GATT, which Taiwan has recognized by
applying as a separate customs territory. Allowing a non-
GATT member, namely the People's Republic of China, to
determine the terms and timing of another territory's
entry into the GATT is unacceptable.
Taiwan has made remarkable economic strides, and
is now our sixth largest trading partner and the 13th
largest trading entity worldwide. Taiwan is also the
largest market-based economy still outside of the GATT.
Clearly, such a key U.S. trading partner and major
participant in the world economy should not remain
isolated from the world trade community by being kept
outside of the world's premier trade regime. The
anticipated successful conclusion to the Uruguay Round
makes the case for Taiwan's GATT membership all the more
compelling for it would further liberalize Taiwan's
economy in areas of critical importance to the United
States.
06/25/91
17:26
202 647 5095
DOS LEGIS AFFAIR
WHLEG
003/005
06/25/91 18:03 202 224 2805
SEN.ROTH-D.C.
+++ DOS LEGIS AFFAIR
003
The President
June 21, 1991
Page 2
We believe that without the leadership of the
dormant. We strongly urge you to move in this direction
United States, Taiwan's GATT application will remain
by demonstrating support for the accession of Taiwan to
the GATT.
Sincerely,
Buie Ril
Thomas W. Daschle
William V. Roth, Jr.
Day Rahyelle
Jh McCin
John D. Rockefeller, IV
John McCain
Sain Daniel n Inouye
Steve Symns
Steven D. Symms
Joseph Juli J I. Lieberman
Bab Dale
Robert Dole
Muchamad
Paul Van Min Simon
Frank H. Murkowski
Howell Howell Heflin Highers
Mr That
Slade Gorton
06/25/91 17:27
202 647 5095
DOS LEGIS AFFAIR
WHLEG
004/005
06/25/91 18:03
202 224 2805
SEN.ROTH-D.C.
+++ DOS LEGIS AFFAIR
004
The President
June 21, 1991
Page 3
Inch
John C. Danforth
David L. Boren
Thad Corlum Thad Cochran
Walcolm Malcolm Wallop Wallop
Larry Larry Pressler Presler
Dan Coats
Diclar Wyche Fowler, Jr.
Bob Pachwood
Bob Packwood
Bob Smith
June James Exon
Bob Smith
Chin. D.D.
Cames mach
Christopher J. Dodd
Connie Mack
J. Bennett Johnston Durenberger
Nich Lugar Chuck Grassley
Richard G. Lugar
Charles E. Grassley
06/25/91 17:27
202 647 5095
DUS LEGIS AFFAIR --+ WHLEG
4 005/005
06/25/91 18:04 202 224 2805
SEN.ROTH-D.C.
+++ DOS LEGIS AFFAIR
008
The President
June 21, 1991
Page 4
alan J Diton
William S. Cohen
Fort
Trent Lott
United States Department of State
Washington, D.C. 20520
June 5, 1991
Enclosed you will find the China package that is being sent to
every Member. I hope you find it useful.
Janet Janet G. Mullins
THE SECRETARY OF STATE
WASHINGTON
JUN - 4 1991
Dear George:
I am writing to urge you to consider carefully how renewal of
most-favored-nation (MFN) status for the People's Republic of
China serves U.S. interests. I assure you that the
Administration stands with Congress in wanting to see greater
respect for internationally respected human rights, a stronger
Chinese commitment to global nonproliferation objectives and
fair trade, and continuing political and economic reform within
China. I believe strongly that renewal of MFN promotes these
goals.
Many in Congress have urged withdrawing or conditioning MFN
renewal as a means of forcing China to respond favorably to our
concerns. We are convinced that MFN withdrawal would instead
undercut our ability to achieve these goals. We advocate a
more selective, targeted application of pressure, instead of
imposing broad, blunt sanctions on everyone in China, punishing
equally the forces of positive change, entrepreneurs and
ideological hardliners.
Our targeted approach has succeeded in setting the agenda in
our relations with China that focuses on human rights, arms
control, and trade issues--issues that Congress is also deeply
concerned about. Withdrawing MFN (or attaching unattainable
conditions) would undermine the foundation on which the process
of engagement was built. If we shut down our dialogue with
Beijing on these issues, we remove an important incentive for
China to respond to our concerns.
I know that Congress is well informed about what China has done
that has fallen short of our expectations. I hope I can
persuade you to look with an open mind at what China has done
to meet our objectives as well. In every area of concern we
have with China, our continued strategy combining sanctions and
diplomatic engagement has leveraged some favorable action from
Beijing. The Chinese support of the UN in the Persian Gulf is
a prominent example, as is the initiation of human rights
dialogues with us and with other Western countries. I have
enclosed material that elaborates on these points.
The Honorable
George Mitchell,
United States Senate.
- 2 -
Make no mistake, the Administration is not easing its pressure
on China. We have had sanctions in place since the brutal
assault on Tiananmen, have imposed some since then, and are
prepared to take further action to deal with new issues which
may arise. We already have in place legal authorities to
selectively target those practices in China that we find
abhorrent, especially in the areas of human rights,
nonproliferation, and trade. I urge you to read carefully the
enclosed fact sheets that demonstrate ours is a determined,
principled approach, not clouded by illusion or wishful
thinking, and indeed goes beyond actions taken by other Western
democracies.
The point I want to leave with you is that we are working
toward the same objective: like you, we want to see across the
board improvement in our relations with China on the basis of
demonstrated and genuine Chinese commitments to international
standards shared by all civilized nations. We will continue to
advance our interests and ideals as we pursue a process of
engagement with China designed to elicit progress toward our
objectives: adherence to international standards on
nonproliferation, free and fair trade, broader reform, and
respect for human rights throughout China. Most importantly,
renewal of MFN is essential to maintaining America's moral
stake in promoting the process of economic and political reform
in China.
Sincerely,
Jim James A. Baker, III
Enclosures:
1. President's Memorial Day speech
2. Fact sheets on MFN
RENEWAL OF CHINA'S MFN STATUS
--Shared Goals on China. Both the Administration and Congress
want to see greater respect for human rights, a stronger
Chinese commitment to nonproliferation and fair trade, and a
continuation of positive social, political and economic
change. At question is how to achieve these goals. As
President Bush said at Yale, "The real point is to pursue a
policy that has the best chance of changing Chinese behavior."
--China Benefits from Contact--Not Isolation. The most brutal
period of communist rule occurred at a time when China was
isolated from the outside world and committed to a policy of
economic self-sufficiency. MFN helped to open China to outside
progressive change. We will not help the Chinese people by
depriving them of employment, cutting off our contacts with
them, and permitting hardline, xenophobic elements to blame the
U.S. for China's economic problems. These will be the effects
of MFN withdrawal.
--MFN Promotes Reform. Foreign trade and investment support
the economic forces that have been driving political and social
change and encouraging a loosening of state control and more
personal freedom. "MFN," in the words of the President, "is a
means to bring the influence of the outside world to bear on
China." Withdrawing MFN would have the greatest adverse impact
on Chinese in the most dynamic, market-oriented coastal
regions. These and other groups who depend on a healthy
commercial relationship to justify business, social and
academic contacts with the U.S. would be grievously hurt.
Old-line convervatives in China will use MFN withdrawal as
reason to close the door on these contacts.
--Other Means Available to Pursue U.S. Interests. The U.S. has
set the agenda for improving the bilateral relationship and has
engaged the Chinese--with tangible results--on key issues of
concern, including human rights, nonproliferation, prison labor
exports and trade issues. Eliminating what the Chinese
consider to be a fundamental pillar of the economic
relationship--MFN trade status--will seriously erode, if not
destroy, our ability to engage the Chinese on these issues.
The President has a broad range of authority to target specific
issues, for example, proliferation and trade problems. He is
using that authority forcefully to press U.S. interests. MFN
withdrawal is the wrong tool for doing this. It hurts our
friends and eliminates a vital avenue of influence.
--A Trade War Will Hurt U.S. Business and Consumers. Raising
tariffs on Chinese products will provoke trade retaliation.
This will put at risk $5 billion (1990) in U.S. exports,
including wheat ($511 million), aerospace ($749 million),
computers and electrical machinery ($860 million), fertilizer
($544 million), cotton ($259 million) and wood products ($281
million). Since no other country is withdrawing MFN, U.S.
business would be forced to cede its market share to others.
Trade actions on both sides could also adversely affect over $4
billion in U.S. investment in China. Without MFN, U.S.
consumers would pay substantially higher prices for
Chinese-made clothing, footwear, toys, tools and electronics.
Hong Kong's economy and our $6-billion investment there would
also be hurt because of close commercial links with South China.
WHY CONTINUING MFN STATUS FOR CHINA SERVES U.S. INTERESTS
The Administration and Congress share the same goals in
China. Both want to see greater respect for human rights,
a stronger Chinese commitment to nonproliferation and fair
trade, and a continuation of positive social, political and
economic change. At question is how best to achieve these
goals. As President Bush said in his commencement address
at Yale University, "The real point is to pursue a policy
that has the best chance of changing Chinese behavior."
Many in Congress have urged withdrawing or conditioning MFN
as a way of forcing China's leaders to address our
concerns. We believe this would be counterproductive and
would make achievement of these goals even more difficult.
MFN withdrawal is the wrong instrument. It is the
equivalent of an undiscriminating blockbuster weapon that
hurts friend and foe alike. Maintaining MFN enables us to
take a more discriminating approach. It helps us stay
engaged, keep China in the international system and use the
commercial relationship to promote reform. In the
President's words, "MFN is a means to bring the influence
of the outside world to bear on China." At the same time,
we are still free to take, as we have already, focussed
measures to address specific problems.
MFN should continue because it serves U.S. interests. By
threatening to withdraw or condition MFN, we allow this
vital link to be held hostage to the reactions of a small
group of hardline leaders in Beijing.
The most brutal period of communist rule occurred at a time
when China was isolated from the outside world and
committed to a policy of economic self-sufficiency. MFN
helped to open China to outside progressive change. We
will not help the Chinese people by depriving them of
employment, cutting off our contacts with them, and
permitting hardline, xenophobic elements to blame the U.S.
for China's economic problems. These will be the effects
of MFN withdrawal.
Foreign trade and investment have been key factors over the
past decade in launching reforms that have loosened state
control and expanded personal freedom. By maintaining MFN,
we ensure an active commercial presence in China which
provides a channel for introducing American values and
ideals--on free enterprise, democracy, freedom of
expression and human rights. The Chinese Government can
control the flow of goods across its borders but not the
ideas which accompany them.
Withdrawing MFN would hurt reformist elements that count on
us for support. Those most seriously hurt would be in the
large, dynamic coastal provinces where market-oriented
reforms have gone the farthest. Millions of Chinese who
depend on a healthy commercial relationship to justify not
only business but social and academic contacts with the
U.S. would be harmed. Maintaining our extensive web of
contacts with the Chinese people and Chinese institutions
would be impossible in an atmosphere of trade retaliation
and mutual hostility.
SANCTIONS AND OTHER MEASURES IN PLACE ON CHINA
The U.S. currently has the toughest position on China
sanctions. While the EC, Japan and Australia have
gradually relaxed their sanctions, the U.S. has reaffirmed
its existing sanctions and taken additional measures.
Post-Tiananmen Sanctions
All the measures authorized by the President following the
Tiananmen Square crackdown remain in effect, with only
minor modifications to take into account U.S. interests:
-- Arms and Military Cooperation. Weapons deliveries
remain suspended as does military cooperation.
-- Embargo on Sales to Military/Police. No licenses are
being issued to dual-use civilian technology items for the
Chinese police or military.
-- Munitions List. Licences for items on the munitions
list remain suspended. (The only exceptions in 1990-91
have been for the Australian AUSSAT satellite project and
Swedish Freja scientific satellite project).
-- Trade and Development Program (TDP) and Overseas Private
Insurance Corp. (OPIC). No new activities since June 1989.
-- Export Control Liberalization. The U.S. remains opposed
to considering proposals for easing COCOM controls on China.
-- World Bank Lending. The U.S. remains opposed to all
World Bank lending except for basic human needs.
-- High-Level Exchanges. Regular, high-level exchanges,
particularly those of a formal, ceremonial nature, remain
suspended. Exceptions have been granted only to pursue
issues of vital concern (e.g., human rights,
nonproliferation issues, trade problems and regional
issues, such as the Persian Gulf and Cambodia).
Additional Measures
Over the past year the following additional measures have
been taken to pursue specific U.S. interests:
Proliferation. The President rejected licenses for a
Chinese satellite project and stated that the U.S. would
impose additional sanctions on any Chinese company found to
violate international guidelines on missile sales. Other
measures are now under consideration.
Trade. The President authorized the designation of China
for trade action under Special 301 for violation of U.S.
intellectual property rights. Over $85 million in Chinese
textile overshipments were blocked because of violations of
the bilateral textile agreement. USTR has stepped up its
consultations with China on the trade imbalance, with talks
scheduled for mid-June.
-2-
o
We have succeeded in setting an agenda in our relations
with China that focuses on human rights, arms control and
trade issues--issues which the Congress is also deeply
concerned about. withdrawing MFN would undermine the
foundation on which this process of engagement was built
and remove an important incentive for China to respond to
our concerns. Our policy of engagement is producing
tangible results.
On human rights, our continued strategy of sanctions and
engagement has led to the release of about 1,000 political
prisoners, freedom for prominent dissident Fang Lizhi and
his family, public commitments to prevent the export of
prison labor, and positive assurances on family
reunification cases. The Chinese have agreed to have a
high-level human rights dialogue with the U.S. This new
dialogue would likely be one of the first casualties of MFN
withdrawal. Emigration and student travel to the U.S.,
which has continued since Tiananmen, would also suffer.
On proliferation, we have China moving in the right
direction. We have made clear that proliferation concerns
will affect our willingness to cooperate with China, for
example, on high-technology exports such as satellites and.
high-speed computers. China has acknowledged, in
principle, the need to act responsibly on military sales,
including the transfer of missile, CBW and nuclear
technology. China agreed to attend the Nuclear
Nonproliferation Treaty (NPT) conference in 1990.
President Yang Shangkun recently stated unequivocally that
China has not sold any intermediate range missiles to the
Middle East since the CSS-2 transfer to Saudi Arabia three
years ago. On the Sino-Algerian nuclear facility, China
has publicly expressed a willingness to follow-
international practice on IAEA safeguards and gave
assurances that the facility is strictly for peaceful
purposes. Senior Chinese officials have agreed to an
in-depth discussion of nonproliferation issues with Under
Secretary Bartholomew in mid June.
To underscore our proliferation concerns, we are informing
the Chinese that we will be sanctioning a Chinese
enterprise for violation of international missile transfer
guidelines and will not license satellite and high-speed
computer exports to China until we reach an understanding
on appropriate guidelines for the export of missile
technology and related equipment.
On global/regional issues, China's cooperation has proven
helpful--even essential--for achieving U.S. objectives. A
permanent UN Security Council member, China played a
crucial role in facilitating passage of UN resolutions on
the Persian Gulf and maintaining international solidarity.
The U.S. and China are working together to find a
comprehensive political solution to the conflict in
Cambodia. China has been exerting positive influence on
Pyongyang to reduce tensions on the Korean peninsula.
-3-
Other Asian countries also look to China as a force for
stability in the region and believe a constructive
U.S.-China relationship is important for that goal.
On trade, China has acknowledged that it needs to import
more from the U.S., responding to concerns about the large
trade imbalance and problems with market access. A Chinese
buying mission is now in the U.S. and will reportedly
purchase over $1 billion in grain, chemicals, fertilizer,
and precision machinery. China has also acknowledged that
it must do more to protect U.S. intellectual property
rights. U.S. trade agencies are engaged in a high-level
dialogue on both market access and IPR problems, which will
continue in June. The Administration is prepared to take
action under U.S. trade law to pursue U.S. interests, as it
did recently in designating China under Special 301 for an
IPR investigation and possible trade measures.
Continuing MFN protects the interests of U.S. business and
consumers. MFN is not a special trade status. It is the
basis for trade that we have with most countries. Raising
tariffs on Chinese products will provoke trade
retaliation. This will put at risk $5 billion (1990) in
U.S. exports including wheat ($511 million), aerospace
($749 million), computers and electrical machinery ($860
million), fertilizer ($544 million), cotton ($259 million)
and wood products ($281 million). Since no other country
plans to withdraw MFN, trade retaliation would put U.S.
business at a competitive disadvantage. Trade actions on
both sides could also adversely affect over $4 billion in
U.S. investment in China. Without MFN, U.S. consumers
would pay substantially higher prices for Chinese-made
clothing, footwear, toys, tools and electronics.
MFN is also important for the stability and prosperity of
Hong Kong's free enterprise economy. Withdrawing China's
MFN status would be a body blow to confidence in the
territory since Hong Kong's economy is increasingly tied to
the growth of South China's export industry. Approximately
2,500 Hong Kong enterprises have shifted their export
production to factories in neighboring Guangdong Province.
An additional 10,000-15,000 South China enterprises do
assembly work for Hong Kong companies. U.S. business,
which has invested over $6 billion in Hong Kong, would also
be hurt. A 1990 survey revealed that 70 percent of
approximately 900 U.S. companies in Hong Kong would face
business difficulties and 50 percent would have to reduce
staff if China's MFN status was discontinued.
o
The bottom line is that withdrawing MFN would seriously
damage U.S. foreign policy interests, limit our contacts
with China, weaken the economic forces for reform and hurt
U.S. business and consumers. Our influence over Chinese
behavior would be weakened, not strengthened. We should
continue MFN because it is in our interest. It enables the
U.S. to stay engaged with China and pursue the issues which
are of vital concern to the American people. As the
President said, "It is wrong to isolate China if we hope to
influence China."
PROPOSALS TO CONDITION RENEWAL OF CHINA'S MFN STATUS
Conditional renewal of China's MFN status has been
presented as a way to force China to address our human
rights and other concerns. It is in fact a high-risk
approach that holds the single most powerful instrument we
have for promoting reform in China as hostage to reactions
of a small group of hardline leaders in Beijing.
Continuing MFN is in the U.S. interest. By facilitating
trade, it acts as a key catalyst to reform, keeps China
open to the outside world, sustains a wide range of
contacts with the Chinese people and provides incentive for
China to stay engaged on issues of vital interest to us.
Conditionality overlooks the importance of MFN for these
long-term objectives and, in effect, accepts them as
expendable in the quest for more limited, short-term goals.
MFN conditionality risks making the Chinese less apt--not
more--to take positive steps on issues of concern to us.
Confronted with a public ultimatum to change policies,
nationalist and hardline elements of the Chinese leadership
are likely to argue--effectively--that national pride and
the need to preserve sovereign authority do not permit
concessions under such duress. Positive actions which the
Chinese might have been willing to take in the context of
negotiation could become politically impossible. The
bilateral dialogue on human rights that we succeeded in
establishing could be the first casualty.
--
Attempts to craft even "soft" (i.e., realistic)
conditionality would be counterproductive. With the
situation on key issues continuing to evolve and so
many Congressional perspectives on what constitutes
acceptable conditions, the end product is likely to
include provisions that provoke the Chinese to
disengage or do not accurately address the current
state of affairs.
Many of the objectives contained in earlier
conditionality legislation (e.g., the lifting of
martial law, freeing of prominent dissident Fang Lizhi
and release of Tiananmen detainees) were eventually
achieved through our strategy of engagement. This
strategy is working and should continue.
Conditional MFN renewal would severely handicap U.S.
business in China. No other foreign companies in China
face the uncertainty of MFN withdrawal by their
government. U.S. companies can't make long-term business
decisions knowing that the renewal of MFN trade status--a
fundamental operating condition--will depend on the
subjective judgments of Congress regarding China's
political behavior.
-2-
--
Renewal of MFN under the Jackson-Vanik already entails
risks which many U.S. companies find burdensome.
Additional conditions would greatly increase those
risks and discourage U.S. companies from trading and
investing in China, leaving the China market to our
competitors and costing American jobs in the process.
-- MFN is the basis for trade that we have with most
countries of the world, even those with which we have
serious human rights and other concerns. If we start
down the road of attaching new political conditions to
trade, U.S. global competitiveness will suffer.
Legislative ultimatums on the Chinese Government are likely
to create a hostile environment that will work against the
expansion of contacts between American and Chinese people
and institutions. Despite our bilateral differences, China
has continued to permit a wide range of contacts, including
emigration, student travel and academic exchanges. MFN
conditionality will give ammunition to old-line
conservatives in China who want to restrict the
liberalizing impact of contact with the U.S.
Other more targeted means, aside from MFN withdrawal, are
available to pursue specific U.S. interests, and the
Administration is prepared to use them. To underscore our
concerns about possible Chinese proliferation, we recently
sanctioned a Chinese enterprise for transferring missile
equipment in violation of international guidelines. We are
also informing the Chinese Government that we will not be
licensing high-speed computers to China or waiving
legislative restrictions on satellite exports until we
reach an understanding on the export of missile technology
and equipment. In the trade area, we recently designated
China under the Special 301 provisions for an
investigation--and possible trade action--because of
inadequate protection of U.S. intellectual property
rights. We are also pressing China at a high-level on
market access and have broad trade authority to use as
leverage, if necessary.
-- Our post-Tiananmen sanctions on military sales,
munitions list licenses, OPIC and TDP programs remain
in place. The U.S. still leads the Western
democracies in the scope and impact of sanctions on
China.
Fact Sheet
Chinese Attitudes Toward MFN Renewal
Our posts in China have been actively soliciting views on
MFN from a very broad range of Chinese citizens. We have
paid particular attention to the opinions of those who are
known to favor further reforms and democratization, and to
those who would be most at risk if repression deepened. We
have also discussed the MFN issue with hundreds of Chinese
students and scholars in the U.S.
Our Embassy and Consulates have reported nearly unanimous
support for renewal of MFN among all sectors of the Chinese
population. While Chinese government officials have tended
to reiterate their government's official arguments, those
who want more reform and democracy in China have actually
used significantly stronger language in urging renewal.
The Washington Post correspondent in Beijing quoted a
Chinese intellectual offering a toast to MFN renewal,
saying "if it was taken away, we would not be able to
meet and talk."
In the same report, a student at Beijing University
(which led the 1989 demonstrations) argued against
conditionality, saying that students "don't agree that
economic blackmail should be used to bring about
democracy in China."
Two of the most prominent dissidents now active in
China acknowledged to us recently that withdrawal of
MFN would seriously jeopardize their ability to
continue speaking out against repression.
Among Chinese students and scholars in the West, the range
of opinion is much more diverse, but still overwhelmingly
in favor of renewal in some form.
In a recent random poll conducted by Chinese scholars
among their colleagues throughout the U.S., only 12
out of 402 supported withdrawal of MFN. Most of the
remainder favored unconditional renewal or modest
conditions.
Of the letters we have received on MFN from many
Chinese in the West, one to the President from England
best reflects the general trend of thought: "As a
Chinese student from the poorest province in China, I
understand what a disastrous effect could a revocation
of China's MFN status bring to my poor parents, who,
as many ordinary Chinese, desperately need, and in
fact have already benefitted from, the influence of
the West. Do not shut up the door that was opened
only after thousands and millions of people sacrificed
their lives. I support your policy on China's MFN." "
MFN
Decision
and
AIMS
MFN Decision Advances U.S. Interests. Continuing China's MFN
status preserves a PRC stake in moving toward the international
consensus on nuclear, missile, and CW nonproliferation, an
objective the Administration and Congress share.
Engagement Pays Off in the Long Run. Beginning in the
mid-eighties, both China's policies and the global
nonproliferation context began to change. China, which once
held an antagonistic view of multilateral controls on nuclear
exports, joined the IAEA in 1984 and sent observers to the NPT
Review Conference in 1990. China's 1987 sale of CSS-2 missiles
to Saudi Arabia pre-dated the INF Agreement, the establishment
of the Missile Technology Control Regime. In 1989, China made a
public commitment to refrain from medium-range missile
deliveries to the Middle East--and has kept to that commitment.
Nuclear Proliferation. Our expression of concern about
Sino-Algerian nuclear cooperation has led to commitments by both
countries to place the cooperation under IAEA safeguards and
their pledges that the cooperation is strictly for peaceful
purposes. We await the next step, i.e. Algeria's discussions
with the IAEA. We view favorably China's public position on
nuclear exports, but would like to see China take the further
steps of joining the NPT and adopting Nuclear Suppliers
Guidelines. Serious concerns remain; the Administration will
not ignore current problems in this area.
-- Missiles. We have engaged in intensive dialogue with Beijing on
its missile export policy. It is clear that in some cases China
has declined proposed missile exports because of foreign policy
considerations. More broadly, the Chinese Ambassador said
recently that China supports effective international control on
military sales, including missiles. That statement constitutes
a modest step toward our objective of a PRC commitment to
observe MTCR guidelines. China's missile export policy remains
a high priority in our bilateral dialogue; problems that
originated before the establishment of the MTCR have not
disappeared, but we have seen some progress over the past
half-decade. China's proliferation policy is gradually changing
in a favorable direction. We aim to accelerate that trend.
Chemical Weapons. China is on record opposing the manufacture
and transfer of chemical weapons, and is participating in
multilateral efforts to ban chemical weapons. We have made some
progress on the subject of controls over exports of CW
precursors, and we hope to advance discussions in this vital
area.
Next Steps. We are encouraged by progress in some areas and
still see a need for progress in others. It is because of our
continuing concerns that we want to maintain a constructive
nonproliferation dialogue with Beijing. Under Secretary Kimmitt
raised these issues in Beijing in May, and Under Secretary
Bartholomew will follow up during his upcoming visit to China.
ECONOMIC EFFECTS OF MFN WITHDRAWAL
--
U.S. Exporters and Investors Would Be Hurt. If MFN is
withdrawn, Chinese trade retaliation is certain, including
reciprocal loss of MFN status for U.S. exports to China and
possibly other administrative measures to market access.
Since no other countries would be withdrawing China's
MFN status, U.S. companies would be put at a
competitive disadvantage. Major exports at stake and
their sales in 1990 include:
--Wheat $511 million
-Aircraft/Aerospace Equipment $749 million
Fertilizer $544 million
-Cotton $259 million
--Timber/paper $281 million
-Computers & Electric Products $860 million
--Chemicals $273 million
U.S. joint ventures in China, which now total almost
1,000 and have invested capital of over $4 billion,
would pay higher duties on U.S.-made components and
their exports to the U.S. would be subject to higher
non-MFN U.S. duties
-- Consumers Would Suffer. U.S. consumers and retailers would
have to pay the sharply higher non-MFN duty rates on
Chinese-made imports, including footwear, clothing and toys
and electrical products. Examples include:
MFN Duty (%)
non-MFN Duty (%)
Footwear
6.0
35.0
Sweaters
6.0
60.0
Stuffed Toys
6.8
70.0
Fans
4.7
35.0
-- Other Tools At Our Disposal to Resolve Key Trade Concerns.
We have ongoing discussions with the Chinese on key
economic and trade issues, including market access,
intellectual property protection (where China was recently
identified under Special 301), textile transshipments and
dumping. We have made progress in some areas and utilized
existing legislation to take additional action where
necessary. China has expressed a willingness to stay
engaged to resolve our concerns. Withdrawing MFN would
seriously weaken our negotiating position on these issues.
IMPACT OF MFN WITHDRAWAL ON HONG KONG AND U.S. BUSINESS THERE
Impact on Hong Kong's Economy. The health of Hong Kong's
economy is increasingly tied to the growth of south China's
export industry. Approximately 2,500 Hong Kong enterprises
have shifted their export-bound production facilities to
the Pearl River delta in Guangdong Province. An additional
10,000-15,000 south China enterprises do assembly work for
Hong Kong companies.
China is Hong Kong's largest trading partner, accounting
for 39 percent of total 1990 trade. Re-exports, which grew
by 20 percent in 1990, underpin Hong Kong's trade
performance.
According to the Hong Kong Government, loss of MFN
status could cut Chinese re-exports via Hong Kong by up
to 44 percent or $4.6 billion.
First-year effects could include $1.2 billion in lost
income and 43,000 jobs or 1.5 percent of Hong Kong's
labor force.
-- Body Blow to Local Confidence. MFN denial would further
erode local confidence, already badly shaken by Tiananmen,
in the run-up to resumption of Chinese sovereignty in
1997.
o
The drop in confidence would accelerate outward
migration from Hong Kong, which now exceeds 50,000 a
year and includes many professionals and managers.
-- U.S. Business Interests Would Be Hurt. The U.S. has the
largest number of regional headquarters in Hong Kong, with
over 40 percent of the total or 252 offices. Almost half
are engaged in trading activities with China, a principal
market and source of supply.
O
U.S. investment of over $6 billion accounts for almost
one-quarter of foreign direct investment in Hong Kong.
A 1990 American Chamber of Commerce survey indicated
that 70 percent of the approximately 900 U.S. member
firms would be adversely affected and 50 percent would
consider reducing staff.
CHINA'S EMIGRATION AND FOREIGN TRAVEL POLICIES
Emigration
China's relatively free emigration policies have continued
since the renewal of MFN status in 1990. In FY 1990,
16,751 U.S. immigrant visas were issued in the PRC. The
U.S. numerical limitation for immigrants from China was
fully met.
The principal restraint on increased emigration continues
to be the capacity and willingness of other nations to
absorb Chinese immigrants, not Chinese policy.
Foreign Travel Policies
China continues to adhere to a relatively open foreign
travel policy. According to Chinese officials, 255,000
persons were issued passports for private travel of all
kinds in 1990, a more than three-fold increase from 1986.
U.S. diplomatic posts in China issued 60,687 nonimmigrant
visas in FY 1990. Last year, 33,800 nonimmigrant visas
were issued worldwide to Chinese students and tourists, a
19 percent increase over FY 1989 and an 84 percent increase
over FY 1988.
Chinese officials report that several thousand students
have returned from overseas for visits after June 1989 and
have been allowed to depart again under expedited
procedures. We cannot verify these figures, but we are not
aware of any cases in which Chinese living in the U.S. who
returned to China for visits after June 1989 were prevented
from leaving again.
-- Foreign travel officially sponsored by the Chinese
Government continued to decline in FY 1990, reflecting
economic austerity measures and concern about extended
delays in the return of officially sponsored scholars to
China.
In February 1990, China issued a new directive requiring
recent college graduates and fourth-year undergraduates to
work for five years before applying for overseas study,
with some exceptions. This directive has undoubtedly
forced some students to defer their plans for overseas
study. However, its full impact is unclear since student
visa applications and issuances continue to increase.
We are aware of a small number of individuals who have had
difficulty in obtaining permission to travel abroad,
apparently because of the political activities of their
relatives in the U.S. We have discussed these cases with
Chinese authorities, who have indicated a willingness to
address the issue.
U.S. -CHINA TRADE AND INVESTMENT
U.S.-China Trade
($ billions)
1979*
1988
1989
1990
%Chg 89-90
Total Trade
2.3
13.5
17.8
20.0
12
US Exports
1.7
5.0
5.8
4.8
-17
US Imports
0.6
8.5
12.0
15.2
27
Trade Balance
1.1
-3.5
-6.2
-10.4
-68
* Last year before U.S. granted MFN status to China.
U.S. Exports to China
($ millions)
1990
Cereals
512
Computers & Electric Products
860
Aircraft & Parts
749
Fertilizer
544
Chemicals
273
Prof. & Sci. Instruments
227
Iron & Steel
44
Cotton Yarn & Fabric
281
Electric Machinery
264
Plastics & Resins
166
Chinese Exports to the U.S.
($ millions)
1990
Apparel
3,197
Toys, Games, Sporting Goods
2,139
Electric Machinery
1,926
Footwear
1,477
Travel Goods
874
Petroleum
661
Fish
396
Plastics
387
Iron & Steel
247
Furniture, Lamps, Bedding
276
- 2 -
Selected Chinese Import Tariffs
Commodity
MFN Tariff(%)
Non-MFN Tariff(%)
Wheat
0
0
Aircraft & Parts
6
11
Fertilizers
30
40
Cotton
30
40
,
Rough Wood
3
8
Polycarboxylic Acids
15
20
Specialized Machinery
20
30
Selected U.S. Import Tariffs
Commodity
MFN Tariff(%)
Non-MFN Tariff(%)
Manufactured Articles
0-32
0-110
Apparel
0-34.6
25-90
Telecommunications
2.4-8.5
35
Footwear
0-48
10-84
Travel goods, handbags
4.6-20
35-90
Petroleum, oils
$.105/bbl
$.21/bbl
Sources of Foreign Investment in China, 1979-89
(Contracted value, $ billions)
Cum.
010
1979-86
1987
1988
1989
Total
Share
National Total
19.99
4.32
6.19
6.29
36.80
100.0
Hong Kong, Macau
12.40
2.36
4.16
3.73
22.66
61.6
United States
2.72
0.36
0.38
0.65
4.11
11.2
Japan
1.91
0.39
0.37
0.52
3.18
8.7
Others
2.96
1.21
1.27
1.39
6.84
18.6
SECMEC 1692
Uga tay
Francy
SENATE ATTITUDES TOWARDS CHINA MFN
US-China Business Council
May 22, 1991
(The following matrix is our best guesstimate based on meetings with Members and/or
their staff, Members' public and private statements, and co-sponsoring existing legislation.
Note: there is no column for straight opposition to MFN, as no one has taken that position
at this time.)
KEY
1. Supports MFN with no conditions
2. Supports MFN, but undecided regarding conditions
3. Supports MFN, but leaning toward "mild" conditions
4. Supports MFN, but leaning toward "harsh" (Mitchell-type) conditions
1
2
3
4
Baucus (D-MT)
Chafee (R-RI)
Riegle (D-MI)
Akaka (D-HI)*
Bond (R-MO)
Daschle (D-SD)
Biden (D-DE)*^
Danforth (R-MO)
McConnell (R-KY)
Bradley (D-NJ)
Dole (R-KS)
Nickles (R-OK)
Bryan (D-NV)*
Durenberger(R-MN)
Packwood (R-OR)
Cranston (D-CA)*^
Lugar (R-IN)
Pryor (D-AR)
D'Amato (R-NY)*
Murkowsky (R-AK)
Robb (D-VA)
DeConcini (D-AZ)*^
Sanford (D-NC)
Roth (R-DE)
Dixon (D-IL)*^
Dodd (D-CT)*
Ford (D-KY)*
Glenn (D-OH)*
Hollings (D-SC)*
Inouye (D-HI)*
Kennedy (D-MA)*^
Kerry (D-MA)*^
Metzenbaum (D-OH)*
Mitchell (D-ME)*^
Moynihan (D-NY)*
Pell (D-RI)*^
Sarbanes (D-MD)*
Wallop (R-WY)*
Wirth (D-CO)*
Wofford (D-PA)*
* Co-sponsored S.1084 (Mitchell conditions)
^ Co-sponsored S. Con. Res. 19 (Cranston sense of the Senate)
HOUSE OF REPRESENTATIVES ATTITUDES TOWARDS CHINA MFN
US-China Business Council
May 22, 1991
KEY
1. Supports MFN with no conditions
2. Supports MFN, but undecided regarding conditions
3. Supports MFN, but leaning toward "mild" conditions
4. Supports MFN, but leaning toward "harsh" (Pelosi-type) conditions
1
2
3
4
Archer (R-TX)
Cardin (D-MD)
Levin (D-MI)
Abercrombie (D-HI)*
Leech (R-IA)
Crane (R-IL)
Solarz (D-NY)
Ackerman(D-NY)*
Matsui (D-CA)
McDermott (D-WA)
Bacchus (D-FL)
Roth (R-WI)
Vander Jagt (R-MI)
Beilenson (D-CA)*
Berman (D-CA)*
Boxer (D-CA)*
Bryant (D-TX)*
Burton (R-IN)*
Dellums (D-CA)*
Derrick (D-SC)*
Durbin (D-IL)*
Edwards (D-CA)*
Erdreich (D-AL)*
Fazio (D-CA)*
Feighan (D-OH)*
Foglietta (D-PA)*
Frank (D-MA)*
Frost (D-TX)*
Gephardt (D-MO)*
Gejdenson (D-CT)
Gilman (R-NY)
Green (R-NY)*
Herger (R-CA)*
Horton (R-NY)*
Jenkins (D-GA)
Jefferson (D-LA)*
Kennedy (D-MA)*
Lagomarsino (R-CA)
Lantos (D-CA)*^
Lewis (D-GA)*
Lloyd (D-TN)*
* Co-sponored Pelosi Bill
^ Co-sponsored HR1571 (Miller bill establishing corporate code of ethics)
page 2, House of Representatives
1
2
3
4
McNulty (D-NY)*
Martinez (D-CA)*
Markey (D-MA)*
Miller (R-WA)*
Miller (D-CA)*^
Mineta (D-CA)*
Mink (D-HI)*
Moran (D-VA)*
Oakar (D-OH)*
Panetta (D-CA)*
Payne (?)*
Pelosi (D-CA)*^
Porter (R-IL)*^
Richardson (D-NM)*
Ritter (R-PA)*
Rose (D-NC)*
Russo (D-IL)*
Scheuer (D-NY)*
Schroeder (D:CO)*
Schulze (R-PA)
Skaggs (D-CO)
Sikorski (DFL-MN)*
Slaughter (D-NY)*
Smith (R-NJ)*
Smith (D-FL)*
Solomon (R-NY)
Spratt (D-SC)*
Stark (D-CA)*
Swett (D-NH)*
Torricelli (D-NJ)
Unsoeld (D-WA)*
Valentine (D-NC)*
Waters (D-CA)*
Waxman (D-CA)*
Weiss (D-NY)*
Wolf (R-VA)*
Yatron (D-PA)*
* Co-sponored Pelosi Bill
^ Co-sponsored HR1571 (Miller bill establishing corporate code of ethics)
a
1
NATIONAL SECURITY COUNCIL
June 19, 1991
FOR: JIM DYER
FROM: DOUG PAAL
FYI
ATTITUDES TOWARDS CHINA MFN
US-China Business Council
June 17, 1991
(The following matrix is our best guesstimate based on meetings with Members and/or their staff, Members' public and private statements, and
co-sponsoring existing legislation. Please contact Rich Brecher at 202/429-0340 if you have any additions or modifications to suggest.
SENATE
KEY
1. Supports MFN with no additional legislated conditions
2. Supports MFN, but undecided regarding conditions
3. Supports MFN, but leaning toward "mild" conditions
4. Supports MFN, but leaning toward "harsh" (Mitchell-type) conditions
5. Supports Resolution of Disapproval
Bold face denotes position identified by Members' public statement
1
2
3
4
5
Adams (D-WA)
Bentsen (D-TX)
Harkin (D-IA)
Akaka (D-HI)*
Bradley (D-NJ)
Baucus (D-MT)
Boren (D-OK)
Lieberman (D-CT)
Biden (D-DE)**
Cranston (D-CA)*^!
Bond (R-MO)
Breaux (D-LA)
Riegle (D-MI)
Bryan (D-NV)*
Moynihan (D-NY)*
Chafee (R-RI)
Brown (D-CO)
D'Amato (R-NY)*
Cochran (R-MS)
Bryan (D-NV)
DeConcini (D-AZ)*^
Danforth (R-MO)
Burdick (D-ND)
Dixon (D-IL)*^
Dole (R-KS)
Conrad (D-SD)
Dodd (D-CT)*
Durenberger(R-MN)
Daschle (D-SD)
Ford (D-KY)*
Gramm (R-TX)
Exon (D-NE)
Glenn (D-OH)*
Hatch (R-UT)
Grassley (R-IA)
Graham (D-FL)
Kerry (D-MA)*^
Kasten (R-WI)
Hollings (D-SC)*
Lugar (R-IN)
Kohl (D-WI)
Inouye (D-HI)*
Murkowsky (R-AK)
Lott (R-MS)
Kennedy (D-MA)*^
Pressier (R-SD)
McConnell (R-KY)
Kerrey (D-NE)
Rudman (R-NH)
Nickles (R-OK)
Leahy (D-VT)
Sanford (D-NC)
Packwood (R-OR)
Levin (D-MI)
Simpson (R-WY)
Pryor (D-AR)
Metzenbaum (D-OH)*
Robb (D-VA)
Mikulski (D-MD)
Roth (R-DE)
Mitchell (D-ME)*^
Seymour (R-CA)
Pell (D-RI)*
Rockefellar (D-WV)
Sarbanes (D-MD)*
Sasser (D-TN)
Simon (D-IL)
Wallop (R-WY)*
Wellston (DFL-MN)
Wirth (D-CO)*
Wofford (D-PA)*
* Co-sponsored S.1084 (Mitchell conditions)
A Co-sponsored S. Con. Res. 19 (Cranston sense of the Senate)
! Sponsored Resolution of Disapproval
RB SENATE NOTES (June 13, 1991):
Sen. Adams (D-WA)
Terry Leitzell of Bogle & Gates brought National Apparel & Testile Assoc to meet with Adams. Adams says he's supportive and would
be willing to help find an alternative.
Sen. Akaka (D-HI)
Co-sponsored Mitchell Bill.
Sen. Baucus (D-MT)
6/4/91
Michael Punke
Dion Anderson
(TMA,Eaton,McDD)
Baucus supports MFN w/o conditions. "Smart weapons not carpet bombing." Supports 301 action to correct trade imbalance, export
controls and multilateral action through COCOM for proliferation problems and Special 301 for IPR problems. Not convinced we can
win veto fight w/o 301 action by the White House. Sandy Berger and the wheat folks have had a lot of contact with them.
Follow-up: Keep in touch with Punke, track progress of Baucus letter. Baucus/Punke May want to meet CIC/Zhao reformers.
Sen. Bentsen (D-TX)
6/6/91
Marcia Miller
(TMA,Dresser,GM)
Focus will be on conditionality. May be another option to Mitchell - a more moderate alternative - but Marcia has no instructions to
begin preparing one. Bentsen has not decided as of yet. Last year, Bentsen was willing to allow conditionality bill to go to floor, but
Dole stopped it. No idea where others in the Committee stand on the issue. Hearing will be held in couple of weeks. Marcia seems soft
on the no-conditions position.
6/14 Marci rejected Council, CIC and Lu Mai applications to testify. Says witness list already skewed toward pro-MFN. We had our
chance last year, wanted to give others a chance. IFCS is on program cause they've been working the issue harder/longer than
anyone?! Human rights/student panel very skewed anti-MFN, with John Kamm defending MFN. Marcia feeding me lines, not
reassuring at all.
6/13 Ray Garcia says Bentsen still holding cards tight to the vest. Ray is organizing delegation of TX companies to visit with Bentsen
next week. Also working with TX Association of Business to send letters. Also working on Gramm.
Sen. Biden (D-DE)
Co-sponsored Mitchell Bill.
Sen. Bingaman (D-NM)
Larry Bowles says he wants to do "something." Bingaman's Lappala cancelled 6/14 appointment w/ Council.
Follow-up: Reschedule appointment.
Sen. Bond (R-MO)
Bond has made public statements in support of MFN w/o conditions. Supports the President. SB client has talked to him. McDD says
he's fine.
Sen Boren (D-OK)
6/11/91
Rebecca Cooper
Brian Seaton
(CIC)
Cooper was not open to new information/ideas. Convinced conditions are "our right" and doesn't seem to care if they are effective or
not. Claims to be working closely with Mitchell and will offer moderate condition package. Did not specify what moderate conditions
may be, but will directly address human rights issues.
Follow-up: ECAT met w/ Rebecca. Wrong to cut off MFN, but very frustrated w/ lack of agressive action from White House. Senator is
undecided. Seems to be some positive movement in her position at least. Does not want to see MFN w/drawn. Ag groups coordinating
joint letter. Should keep channels open with Boren and staff.
Sen. Bradley (D-NJ)
6/4/91
Alix Sundquist
(TMA,Dresser,ABB,Eaton)
Alix supports MFN but has no entre to Bradley. Bradley did not consult staff on the issue last year either. Alix only on temporary
assignment in Bradley's office - starts new assignment as Counsel General in Bourdeaux next week. Bradley still undecided, but
leaning toward withdrawing MFN. MFN has not worked. Political dimension reinforces this position. Would like specific info on impact
of MFN withdrawal on NJ employment.
Follow-up: Contact J&J, Concord, W-L, ATT, Sealand, Nepera, Exxon, Cyanamid, Hoechst, Human Resources, American Standard,
Allied Signal to follow up. Sent letter 6/8. TMA concentrating on this office. Sent letter signed by 24 toy companies. He appears to be
backtracking from his initial stand.
Sen. Breaux (D-LA)
6/11/91
Mark Ashby
(CIC,TMA,GM)
Mark has China/Taiwan experience and speaks fair Chinese. Asked a lot of specific questions about new developments in China
(forex retention, tax system, rehab of old reformers, etc.). Mark is pushing for MFN, and was interested in the Baucus letter, but says
the Senator is undecided. Breaux' initial posture based on emotional response - now reconsidering. There is a split w/in the office.
Mark remarked that correspondence from business has been pro-MFN and heavier than last year. Leaning toward MFN w/o
conditions, but will be more influenced by Bentsen than Baucus. 6/14 RB stopped in to ask if Breaux interested in meeting with
CIC/Zhao reformers. Ashby thinks he might be and will put it to him over the weekend. Also may help with opposition in the office.
Follow-up: Keep In touch with Mark and arrange meeting with CIC/Zhao folk.
Sen. Brown (R-CO)
5/31/91
Carter Pilcher (foreign policy LA)
(TRW,TMA,MCDD)
Brown circulating letter regarding concern for prison labor. Voted for Pease w/ Pelosi amendments last year, but did not sponsor
Mitchell this year. Pilcher feels business community let students down, and is not protecting workers from persecution. Don't think
Pilcher represents Senator's views on this matter (hope not at least).
Follow-up: 6/8 sent CIC materials and JV paper. Stressed point that business, by its nature, is subversive to a centralized command
economy. Decentralization, which is necessary for economic takeoff, weakens binds of totalitarian regime.
6/13 Senator remarks/questions at Senate Foreign Relations hearing seemed supportive of MFN. Said he was interested in examining
trade aspects of MFN w/drawel. and noted US maintains MFN w/ many countries that sport poor human rights records. Dictated
conditions are not effective means for influencing others. Interested in pursuing other ways of influencing Beijing, w/o using MFN as
bargaining chip. May support light symbolic conditions.
Follow-up: Should arrange CIC/Zhao meeting with Senator.
Sen. Bryan (D-NV)
(ECAT)
Co-sponsored Mitchell Bill. Feels something needs to be done, but not sure what. Undecided on conditions. May be persuaded to take
another course.
Sen Burdick (D-ND)
Vicki Hicks
Mr. Yi met with Hicks. Burdick supported MFN last year, but decision is more difficult this year. May vote party line.
Sen. John Chafee (R-RI)
5/20/91
Christopher Dachi (L.A. - did China junket)
Michael Platner (L.A. - tax and trade)
(TMA)
Dachi strong supporter, Plantin feels "no condition" stand is unrealistic. Senator was strong supporter last years, but they have not
discussed issue w/ him this year. Dachi expressed possibility of Chafee taking leadership role in support of MFN, but will have to
overcome internal staff resistance (Platner and Chief of Staff). Hasbro CEO should be able to pull some weight w/ Chafee.
Follow-up: 5/20 sent thank you and copy of investment position paper and materials on investment in S. China. TMA arranged Hasbro
CEO meeting with Chafee. Chafee reportedly supporting MFN w/o conditions.
Sen. Thad Cochran (R-MS)
6/11/91
Robert McArthur
(CIC,GM)
Concerned about human rights and missile sales, but not sure how to go about it. Understand that formal conditions would be
counterproductive. Mentioned the damage MFN w/drawal would have on Payless.
Follow-up: None.
Sen. Conrad (D-SD)
6/11/91
Mr. Cline
Cline very supportive of our position. Cline was Chinese language/lit major at Univ Illinois and knows Asia well. Has published 2 op
eds in Balto Sun. On principle, the Senator opposes unilateral sanctions - they are not effective and counter productive. Conrad also
concerned with fate of Hong Kong. At this point, Conrad is undecided, but will probably go with MFN.
Follow-up: Should follow-up to gauge Conrad.
Sen. Cranston (D-CA)
Co-sponsored Mitchell Bill. Sponsored S.J Res 153 to w/draw MFN.
Sen. D'Amato (R-NY)
Co-sponsored Mitchell Bill. Only wants to meet with NY companies.
Sen. Thomas Daschle (D-SD)
5/20/91
Mark Ulven (L.A. - trade and ag)
(TMA, AT&T)
Senator undecided - may be sympathetic to some conditions. Ulven says Daschle would have cosponsored Mitchell bill if not for wheat
exports. My sense is that Ulven may be more hostile to our position than the Senator. Ulven would like to hear from Zhao Ziyang
people.
Follow-up: 5/20 sent thank you and copies of investment position paper and China Info Center paper from last year. Will forward Gao
Xin letter and new position paper when it is available. Arrange for CIC people to meet with Daschle/Ulven.
6/11 RB saw Ulven and Michael Garrity again along with Xiao Xia and Liu Yuan from CIC. Very good meeting. CIC made persuasive
pitch. Should followup w/ phone call to gauge Daschie's position.
Sen. John Danforth (R-MO)
5/22/91
Kevin Dempsey (Counsel)
(TRW,TMA)
He is nervous about the White House, triggered by the Fitzwater talk regarding conditions. Danforth supportive of MFN w/o conditions,
but afraid to get out front on this, until President makes his position clear. Feels something does need to be done on trade front, and
Special 301 is a start, but more is warranted. Very nervous about starting any discussion of conditions - would either be so weak as to
be toothless (and an embarrassment), or for-real, and thus doom MFN. Dempsey noted we have allies on the Hill (Baucus). Says key
to Bentsen is to help his trade guy over his foreign affairs people. Same goes for Gephardt, who is very influential on trade matters.
Follow-up: Sent letter 5/22.
Sen. DeConcini (D-AZ)
Co-sponsored S. Con. Res. 19, Mitchell Bill and own Resolution of Disapproval.
Sen Dodd (D-CT)
6/4/91
Matt Hersh
(McDD,GM,Eaton,TMA,Dresser,ABB)
Hersh admits conditions not effective. Hersh very interested in info on S-N China dichotomy. Also wants details on CT commercial
interests. Concerned that MFN withdrawal will hurt primarily low-income Americans. Dodd co-sponsored Mitchell Bill (did not consult
Hersh), but will not be out front on this issue. I don't think we can turn him around on MFN, but could at least silence a potential critic.
Follow-up: 6/8 sent materials on North VS South China. Press UTC to weigh In with them. Followup with State of CT.
Sen. Robert Dole (R-KS)
6/7/91
Al Lehn
Lehn told TS on phone he is "meetinged out" on China MFN - and not willing to meet with Council. Dole on record supporting
President. If didn't, wheat farmers would have his hide.
Follow-up: 6/8 sent packet of materials including positon papers, jv paper, CIC and Ying Liu materials.
Sen. Durenberger (R-MN)
5/29/91
Michael Zarren
(McDD, TMA, CDC, Cargill, Fluor)
Supports Bush's efforts to retain MFN. *MFN is not the right tool to get China to do what we want them to do." But not 100% on this.
Would like to see a complete list of MN companies with commercial interests in China (incl smaller companies). Zarrin is optimistic
President will prevail in veto fight. Zarrin visitied BJ, Kunming and GZ in March/April. Met with model entrepreneurs in GZ.
Follow-up: Send list of companies. Should see again.
Sen Exon (D-NE)
6/6/91
Chris McLean
(RD Folsom, Lou Dreyfus)
Supported the President's position last year, but needs to "study" the issue more this year. Concerned with what MFN extension got
us last year. Also concerned about weapons sales and convict labor problem. Folsom gave him CRS wheat report.
Follow-up: 6/8 sent export stats and CIC and economist materials.
Sen. Glenn (D-OH)
6/91
(ECAT)
Gonna stick with Sen. Mitchell.
Sen. Gramm (R-TX)
6/11/91
Wayne Abernathy
(CIC,TMA,GM,TRW,Dresser,Haliburton)
Tends to support the President, and probably would not vote for any bill the President would veto, but would vote for conditions if
White House favored them. Texas out-exports California on per capita basis and is second only to CA for total exports. Gramm is a
free trader.
Follow-up: None.
Sen. Grassley (R-IA)
5/29/91
Bob Zudwiczak - AA
(McDD, Cargill, CDC)
Senator undecided. Will wait and see what comes out on the floor. "Got burned last year." (?) Vote will be decided on pure politics.
Mexico fast track used up a lot of Bush's political capital. Members will vote their conscience or the politically expedient option on
MFN. Bob thinks some conditionality may be warranted, but will wait to seen if alternative to Mitchell emerges. RB: gut feel is that
Grassley would vote for conditions on first go-round, but support President on the override.
Follow-up: 6/8 sent CIC and Ying Liu materials. Should see him again as issue develops. 6/1 sent letter and materials.
Sen. Harkin (D-IA)
6/14/91
Mr. Sweeney
(TMA)
Senator has real problems with China - particularly concerned with human rights. Recognize distinction between political and
economic complaints, but Harkin does not believe the President will follow through with sanctions. "Hear a lot of rhetoric, but when
push comes to shove, doubt he'll implement sanctions." Harkin didn't cosponsor Mitchell or Deconcini, but leaning against MFN for
China. Does not buy assumption that economic reform necessarily leads to political reform. Considers MFN a reward, not a right.
Follow-up: None.
Sen. Hatch (R-UT)
6/14/91
Steve Brown
RB spoke to Brown on phone. Senator will support administration. Recognize problems, but MFN not the tool to use. Brown not aware
if Senator has made public comments on the subject.
Follow-up: Brown will be in Utah all next week. May schedule to drop by and leave some materials. No rush.
Sen. Mark Hatfield (R-OR)
6/7/91
Julie McGregor
Told TS she thought it would be better to just send information than to meet.
Follow-up: 6/8 sent packet of materials including CIC and Ying Liu materials. Call and scope out Hatfield's position.
Sen, Kasten (R-WI)
6/14/91
Mark Rose
(TMA,Dresser,GM)
Senator now formulating position. Wants to hear from UW Chinese students. Also wants shopping list of WI interests in China. Senator
would like to talk on phone with UW students, and may want to meet with CIC and Zhao reformers.
Follow-up: Arrange CIC/Zhao meeting with Senator. Call Jean Sybelvin at 224-5323, and refer to Mark's recommendation. Ask
CIC to Identify some UW supporters.
Sen. Kerry (D-MA)
(ECAT)
Co-sponsored Mitchell Bill. Remarks at 6/13 Sen. Foreign Relations Hearing indicate Senator favors keeping MFN with light
conditions. Believes our influence, and influence leveraged by trade is major catalyst for change in China. Does not want to "cut off our
nose to spite our face." Says Mitchell goes too far. Would like to see China cut off weapons supplies to Khmer Rouge. 6/15 article in
Boston Globe indicate Kerry now supports President's position.
Follow-up: Arrange Kerry to meet with CIC/Zhao reformers.
Sen. Kennedy (D-MA)
Co-sponsored Mitchell Bill ans S. Con. Res. 19.
Sen. Kerrey (D-NE)
Co-sponsored Mitchell Bill
Sen. Kohl (D-WI)
6/14/91
Mullooly
(TMA)
Mullooly sensitive to free trade argument. Kohl also sensitive to business issues. He took lead role in getting Chinese students into the
States. Kohl stepped in to meeting, and RB mentioned pro-MFN democracy activists and Zhao reformers are coming down to DC -
Kohl may wish to meet with them. Mullooly requested memo on WI interests in China. Mullooly relatively junior staff. Will have to
convince Chief Counsel Jon Leibowitz to bring Kohl over on this issue.
Follow-up: Prepare memo on WI interests. Arrange CIC and Lu Mai to meet with Kohl. Work on Jon.
Sen. Lieberman (D-CT)
6/14/91
Danvers
(Dresser, TRW,AIA)
Senator wants to do something - leaning towards Win Lord's moderate conditions. "We want cover," and it's going to be conditional
MFN. The Baucus letter is not enough. President has no credibility w/ Congress on this issue. Don't believe he will follow through. Too
little too late.
Follow-up: Denvers, and maybe the Senator would be interested in meeting CIC and the Zhao reformers. Arrange meeting.
Sen. Lott (R-MS)
6/11/91
Dr. Miller
(CIC,TMA,GM)
Miller new to job, but picking it up fast. Was initially opposed to MFN, for emotional reasons, but more he learns about subject, the
more he is convinced this is not the answer. Lott undecided as of yet. Textile interests may sway him to conditions.
Follow-up: Should keep up the pressure, and get some MS businesses in to see him.
Sen. Lugar (R-IN)
6/4/91
Andy Semmel
(TMA, Dresser, Eaton, McDD, GM, Louis Dreyfus)
Andy thinks some Republican alternative that blends Mitchell and Bush position will be needed. Senate will pass some type of
conditionality bill. The challenge is making it meaningful, but allow MFN wot be extended. Substantive arguments are convincing, but
gotta work the politics. We discussed possible democratic allies: Boren, Robb, Daschle, Bentsen & Rockefeller (in addition to Baucus).
Follow-up: 6/8 sent JV piece and CIC/economist materials.
Sen. Mitch McConnell (R-KY)
5/22/91
Brian Riendeau (friend of VL)
(TRW,TMA)
McConnell undecided. Riendeau would like to see MFN extended w/o conditions considering the issue strictly on its merits. But the
politics are ugly. There is a division w/in the staff on this issue. No decision was made last year. McConnell did back the President on
the student visa issue. Riendeau very impressed by Bush statement at Republican caucus announcing his intent to renew MFN. It was
evident this is issue he is personnally, and sincerely committed to winning. This is not an issue to break with the President on.
McConnell going to HK and Thailand over July 4 recess. The Senator wants to hear from HK interests.
Follow-up: Sent conditions paper and offered to put McConnell in touch with HK businesspeople. Should follow up with Brian and
Peter Lo. 6/11 met with Brian and CIC people. Good substantive meeting. Peter had dinner with Mitch. May arrange to meet with
Senator when CIC folks come to testify for Senate Finance.
Sen. Frank Murkowski (R-AK)
5/31/91
(Jennifer Brick LA)
(TMA,Halliburton(
Jack is 95% sure Senaor will support unconditional extension. Has been approached by group of Chinese students in AK that support
conditions. Murkowski very interested in extending MFN to Vietnam, and will use same argument that Bush uses for China. Senator
feels we will retain MFN only if coupled with strong administrative action. MFN is "not the proper tool," but would support onter actions.
Follow-up: 6/8 sent letter and CIC, economist materials.
Sen. Pressier (R-SD)
Doug Miller
Told TS on phone that he'd like to "share intelligence." Repeatedly did not return RB's repeated phone calls. 6/3 Congressional
Record (S 6906), supports Bush's China policies. Denial of MFN would be a mistake - would lessen our influence inside China. We
forget how important our businessmen are in spreading the ideals of American free enterprises and democracy. Concerned about loss
of US export opportunities.
Sen. David Pryor (D-AR)
5/22/91
Ed Quick (friend of VL)
(TRW,TMA)
Quick has no idea where Pryor stands on issue. He had a heart attack and won't be back till June. Pryor was undecided throughout
the debate last year. Will probably follow Mitchell and Ford, since Pryor is #3 ranking democrat.
Follow-up: 5/23 sent letter along w/ listing of AR exporters to China. 6/91 ECAT met with Don Harrell (AA). Cal thinks Pryor might be
persuaded to go w/ MFN w/o conditions. Leaning toward our position.
Sen Riegel (D-MI)
5/29/91
Rick Sammans
(TMA, TRW)
We have a leader with a strong position on this (Mitchell), and their is a strong prediliction to support your leader. Different debate than
last year. This is high politics now. Skeptical about State's assurances on emigration. Whether it will hinder or help is open to
judgement, so will probably decide based on politics.
Follow-up: 6/1 sent letter. ECAT met with Sammans and indicated willingness to pursue more moderate course than Mitchell.
Sen. Robb (D-VA)
5/29/91
Peter Cleveland
(TMA, Cargill, CDC, McDD, ABB)
Senator is undecided. Supported the President last year, but much more difficult situation this year. Senator is aware of the economic
stakes involved, but facing the basic question: "What can we do?" Robb recognizes moral component of our foreign policy, concerned
about human rights and Cambodia. Recognize that Mitchell Bill is just delayed removal - conditions are too tough, and 6 months is
insufficient amount of time.
Follow-up: 6/1 sent letter addressing need for China cooperation for peaceful settlement of Cambodia problem and 1990 CIC
materials. Should see again.
Sen. Rockefellar (D-WV)
6/14/91
Bill Reinsch
(RD,TMA,IBM)
On McGlothlin, Senator expressed sympathy for Soviet MFN cause they are moving in right direction. China is moving the other way.
WV does not have great deal of commercial interest, and Reinsch, not surprisingly, unimpressed by TMA's pitch for imports (Reinsch
was formerly Heinz' trade guy).
Follow-up: IBM to get details on their China business.
Senator William Roth (R-DE)
5/20/91
Mary Irace
(AT&T, TMA, GM)
irace sympathetic to no conditions, but claims Roth as yet undecided. Roth was strong supporter last year. Irace stressed need to get
CEOs to contact Senators directly. Also want to hear from the students.
Follow-up: 5/20 sent thank you and copies of investment position paper and China Info Center paper from last year. Will forward
Gao Xin letter and new position paper when it is available. Should meet again, and arrange CIC to meet with Roth.
Sen. Warren Rudman (R-NH) 6/7/91
Paul Jacobson
Jacobson told TS on phone that Rudman is behind the President and a meeting is not necessary.
Follow-up: 6/8 sent materials including CIC and Ying Liu materials. Should contact Jacobson and further scope out position.
Sen. Seymour (R-CA)
6/12/91
Pat McCartin
(CIC)
Gave us the glad hand, but would not reveal anything about the Senator's position.
Follow-up: Should talk to again. Maybe see someone in the Senator's office. McCartin is on sub-committee staff.
Sen. Simon (D-IL)
6/13/91
At Sen. Foreign Relations Hearing said he supports conditions and would vote for Mitchell bill rather than approve MFN. Intent on
"sending a message" to the Chinese people and government.
Follow-up: None.
Sen. Simpson (R-WY)
6/6/91
Katherine Burnett
(Dresser,GM,TMA)
Supports MFN w/o conditions. Interested in exploring w/ Dole and Sen Finance a strategy to take wind out of Mitchell's sails. 301
action ala Baucus may be in order. Talking to Baucus on this. White House meeting on Tuesday was a rah rah session. WH advice is
to wait and let Mitchell play his cards.
Follow-up: 6/8 sent JV report and CIC/economist materials.
6/11 press release quoting Simpson statement to Hong Kong mission claiming "we'll get enough votes to sustain an (MFN) vote. and
it will be bi-partisan." "I'm totally and deeply committed and we're going to get it done - - w/o conditions."
(senate.mmo/mfn)
THE WHITE HOUSE
WASHINGTON
SECOND MEETING 6/12/91
COCHRAN
Supports the President. Worried about failure to
pass MFN would undermine the private sector.
NICKLES
Will be with us in the end. Student vote was
tough last year. Wants us to get some Democrats
involved. Concerned about Chinese missile sales
to Syria. Would support Sense of Senate
Resolution on slowing imports.
GRAMM
Supports us. Wants us to get some Democrats.
Also make this vote a litmus test of loyalty to
the President. Also get farm groups energized to
support us.
MURKOWSKI
Will support but needs some cover. May support a
Sense of Senate on students. Worried that GB is
perceived as too unyielding on Chinese student
issue.
THURMOND
Supports the President totally. Worried that we
don't do anything to screw up prison labor export
program is the U.S.
BOB SMITH
Not there yet. Looks at E. Europe and doesn't see
how MFN has helped us (?) Also is troubled by
sanctions on South Africa but not on China.
KASTEN
Getting some student support helps him. We must
stop missile sales to Syria and Pakistan. Also
concerned that we show support for Dalai
and
Radio Free China. Not there yet.
LOTT
Will be there in the end if it's Bush VS.
Mitchell. Wants us to get Southern Democrats.
Trade deficit plus missile policy bothers him
most.
05/31/51
041 5095
DOS LEGIS AFFAIR
NSC LEGISLATIVE
002/003
First Meeting
HOUSE
Foley:
is not comfortable with the huge momentum to revoke
MFN within the House. As a representative from a
wheat-exporting, Pacific coast state and the home of
Boeing aircraft, he understands all the drawbacks of
the loss of MFN for China.
Michel:
as Republican leader, supported the President's China
policy last year and will be important in influencing
fence-sitting members of his party this year.
Rostenkowski: as Chairman of the Ways and Means Committee
supported the President last year on unconditional
MFN. He will have an important say in the procedures
for bringing the MFN bill out of committee and to a
vote on the floor.
Archer:
Ranking on Ways and Means, fully supported the
President again. last year and will be an important ally
Gibbons: as Chairman of the Trade Subcommittee of Ways and
Means will have equal importance in managing these
bill and has been the President's hardest working
supporter in preserving MFN.
Crane:
is ranking on the subcommittee, supports the
President, and is an effective counter to those more
conservative Republicans on the subcommittee who would
like to disrupt Gibbons' helpful tactics.
Fascell is interested in a practical approach to MFN for
China. Even though he may vote against the President
on the floor, he is interested in working backstage to
formulate the best conditionality alternative to
Pelosi's bill.
Broomfield has not been a supporter of the President's
policy in the past but as the ranking member of HFAC,
he should be involved in the first White House meeting
on MFN.
SENATE:
Dole:
has consistently spoken out strongly on MFN and
has carried the day on MFN on a number of
occasions, most emphatically last fall when he
threatened Mitchell with 20 hours of debate if
the MFN conditionality and denial bills from the
House were put on the calendar at the end of the
session.
Lugar:
has been the advocate for the administration
(opposite Mitchell) in early TV debates about
this year's decision to renew MFN. He is,
however, very concerned about the proliferation
issue as a part of the MFN debate.
Bentsen:
is opposed to the revocation of MFN, but he must
balance those instincts against his role as
Chairman of the Finance Committee and legislative
ally of Mitchell. He will be most concerned
about allegations of unfair trading practices by
the Chinese as a truly relevant issue for
consideration of MFN status.
Simpson:
as Minority Whip, has been one of the most
resourceful and tenacious supporters of the
President's China policy. He will be a staunch
ally in this year's debate.
Rudman:
has been the only Senator to visit China since
Tiananmen, which he did at the request of the
President. He has consistently supported the
President's policy, even in some of the early
Sense-of-Senate votes when 90 percent of the
Senate condemned the policy.
Boren:
as Chairman of the Intelligence Committee, will
be a key member on the issue of missile
proliferation. Coming from a wheat exporting
state, he realizes the cost to his farmers from
trade retaliation by the China to a MFN loss.
Lieberman:
is interested in both human rights and
proliferation problems. He is somewhat impressed
with the President's new sanctions announced at
Yale. He has been contacted by United
Technologies regarding aircraft exports to China.
Robb:
is concerned about both the human rights and
proliferation issues. He is in favor of
establishing some markers for the Chinese for
future MFN waivers, but he believes that the
Mitchell bill will simply lead to withdrawal in
six months. Virginia businessmen have been
lobbying him heavily on MFN for China.
b
S.1084
Cosponsors, by Name
(Screen B - - 1 of 2)
CURRENTLY: 26 Democrats
2 Republicans
---
28 Cosponsors
AKAKA (D-HI)
As Introduced 05/16/91
BIDEN (D-DE)
As Introduced 05/16/91
BRYAN, RICHARD (D-NV)
As Introduced 05/16/91
CRANSTON (D-CA)
As Introduced 05/16/91
DECONCINI (D-AZ)
As Introduced 05/16/91
DIXON, ALAN (D-IL)
As Introduced 05/16/91
DODD (D-CT)
As Introduced 05/16/91
D'AMATO (R-NY)
As Introduced 05/16/91
FORD, WENDELL (D-KY)
As Introduced 05/16/91
GLENN (D-OH)
As Introduced 05/16/91
GRAHAM, BOB (D-FL)
Added 05/21/91
HOLLINGS (D-SC)
As Introduced 05/16/91
INOUYE (D-HI)
As Introduced 05/16/91
KENNEDY, EDWARD (D-MA)
As Introduced 05/16/91
KERREY, BOB (D-NE)
Added 06/05/91
KERRY, JOHN (D-MA)
As Introduced 05/16/91
Type selection, 'MENU' or 'HELP'
S. 1084
Cosponsors, by Name
(Screen B-2 of 2)
LEAHY (D-VT)
As Introduced 05/16/91
LEVIN, CARL (D-MI)
As Introduced 05/16/91
METZENBAUM (D-OH)
As Introduced 05/16/91
MIKULSKI (D-MD)
As Introduced 05/16/91
MOYNIHAN (D-NY)
As Introduced 05/16/91
PELL (D-RI)
As Introduced 05/16/91
SARBANES (D-MD)
As Introduced 05/16/91
SASSER (D-TN)
As Introduced 05/16/91
WALLOP (R-WY)
As Introduced 05/16/91
WELLSTONE (D-MN)
As Introduced 05/16/91
WIRTH (D-CO)
As Introduced 05/16/91
WOFFORD (D-PA)
As Introduced 05/16/91
Type selection, 'MENU' or 'HELP'
SENATOR BROCK ADAMS
SENATOR PAUL WELLSTONE
4
SENATOR DANIEL AKAKA
4
SENATOR TIMOTHY WIRTH
4
SENATOR MAX BAUCUS
2
SENATOR HARRIS WOFFORD
4
SENATOR LLOYD BENTSEN
2
SENATOR JOSEPH BIDEN
4
SENATOR JEFF BINGAMAN
SENATOR DAVID BOREN
2
SENATOR BILL BRADLEY
4
SENATOR JOHN BREAUX
SENATOR*RICHARD BRYAN
4
SENATOR DALE BUMPERS
SENATOR QUENTIN BURDICK
SENATOR ROBERT BYRD
SENATOR KENT CONRAD
SENATOR ALAN CRANSTON
4
SENATOR THOMAS DASCHLE
2
SENATOR DENNIS DECONCINI
4
SENATOR ALAN DIXON
4
SENATOR CHRISTOPHER DODD
4
SENATOR JAMES EXON
4
SENATOR WENDELL FORD
4
SENATOR WYCHE FOWLER
SENATOR JOHN GLENN
4
SENATOR AL GORE
SENATOR ROBERT GRAHAM
J
SENATOR TOM HARKIN
SENATOR HOWELL HEFLIN
SENATOR FRITZ HOLLINGS
SENATOR DANIEL INOUYE
5
SENATOR BENNETT JOHNSTON
2
SENATOR TED KENNEDY
4
SENATOR JOHN KERRY
4
SENATOR BOB KERREY
SENATOR HERB KOHL
SENATOR FRANK LAUTENBERG
SENATOR PATRICK LEAHY
4
SENATOR CARL LEVIN
4
SENATOR JOSEPH LIEBERMAN
3
SENATOR HOWARD METZENBAUM
4
SENATOR BARBARA MIKULSKI
1
SENATOR GEORGE MITCHELL
5
SENATOR DANIEL MOYNIHAN
L
SENATOR SAM NUNN
SENATOR CLAIBORNE PELL
4
SENATOR DAVID PRYOR
2
SENATOR HARRY REID
TOTALS
SENATOR DONALD RIEGLE
3
SENATOR CHARLES ROBB
2
1.
No Conditions
SENATOR JOHN ROCKEFELLER
2.
Undecided on Conditions
8
SENATOR TERRY SANFORD
2
3.
Mild Condition
2
SENATOR PAUL SARBANES
4
4.
Supports Mitchell
28
SENATOR JIM SASSER
4
5.
Opposes MFN
SENATOR RICHARD SHELBY
SENATOR PAUL SIMON
3nd
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