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Clinton to renew Normal Trade Relations with China

June 2, 1999
Web posted at: 4:51 p.m. EDT (2051 GMT)

WASHINGTON (AllPolitics, June 2) -- President Bill Clinton will notify Congress Thursday that he is renewing China's most-favored-nation (MFN) trading status -- now known as Normal Trade Relations (NTR) -- for another year, CNN has confirmed.

MFN/NTR status offers low tariffs and treats countries as normal trading partners.

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The formal notification, required by the Thursday deadline, is expected to trigger a major debate in the House and Senate due to allegations of Chinese espionage against the U.S. and other recent diplomatic tensions, including charges China tried to influence the 1996 presidential election with illegal campaign contributions.

One of the first speak out against Clinton decision, Rep. Nancy Pelosi (D-California), derided the president for making the decision near the 10th anniversary of the Tiananmen Square massacre.

"Just as the president's timing is sad, so too is his policy. This administration's China policy, like that of the administration before it, has not succeeded in making trade fairer, people freer, or the world safer," Pelosi said in a written statement.

But she also warned the Republican leadership in Congress not to inject the MFN/NTR debate with partisan politics only to support the president's position in the end.

"For the past 10 years, we have had a bipartisan coalition of Members of Congress who have opposed the Bush-Clinton China policy. Each year, the Republican leadership has opposed our efforts. This year, with a highly charged partisan atmosphere, the Republican leadership now wants to have it both ways.

"They may want to exploit politically the failures of the Clinton China policy, while appeasing the business community by voting for MFN/NTR, the centerpiece of that policy. The Human rights situation in China and Tibet challenges the conscience of our country, and we respond with business as usual," Pelosi said.

The renewed MFN/NTR status will go into effect unless both chambers of Congress pass resolutions of disapproval within 90 days. If that were to occur, Clinton could veto those resolutions.

Then Congress would have to pass the resolutions again by a two-thirds majority to kill the MFN/NTR status.

Presidential aides say Clinton will justify the renewal on the grounds that it is in the national security interest of the U.S. to continue the policy of "constructive engagement" with China.

The U.S. granted MFN/NTR status to all its trading partners in 1934. But in 1951, during the early days of the Cold War, the policy was modified to require the president to suspend the MFN/NTR status of all Sino-Soviet bloc countries.

The Trade Act of 1974 allowed "nonmarket economy" countries to be granted a waiver and have their MFN status restored. Under the conditions of that act, the waiver must be renewed every year. President Jimmy Carter sent Congress in 1979 a trade agreement with China that included a MFN waiver. Normal trade status was formally restored to China on February 1, 1980.

Last year, at the request of Clinton, Congress passed a law formally changing the name from Most Favored Nation Status to Normal Trade Relations. However, it is still widely referred to as MFN.

Despite a strained relationship after China's 1989 crackdown of protestors in Tiananmen Square, China has been granted a MFN waiver every year since 1980.

CNN's Wolf Blitzer contributed to this report.

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Wednesday, June 2, 1999






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