SOURCES SAY CLINTON TO OK CHINA'S MFN

Byline: Jim Ostroff

WASHINGTON--President Clinton is slated to announce Friday that he will renew China's Most-Favored-Nation trade status for another year, sources reported Wednesday.
Clinton will inform Congress he has concluded it is in the U.S.'s economic and political interests to again extend MFN to China, sources said. The status accords imports from China the same preferential duty rates given to almost every other nation. The deadline for this decision is Saturday.
The MFN renewal takes effect automatically on July 3 unless Congress votes to reverse the President's decision. Clinton can veto this action and Congress can in turn override the President by a two-thirds vote.
Analysts here had expected the annual rite of MFN renewal for China to be less controversial than in the past since the President last year issued an order "delinking" China's human rights and nuclear weapons policies from decision-making on MFN. However, sources here said that as early as Tuesday, Rep. Gerald Solomon (R, N.Y.), chairman of the House Rules Committee, will introduce a motion of disapproval to deny MFN for China. Since this motion is a privileged one under House rules, it cannot be bottled up in committee. Congressional sources say a vote on the Solomon motion could come just before the July 4 recess.
As reported, Solomon told a House Trade Subcommittee hearing a week ago that he planned to introduce--as he does annually--legislation to strip China of its trade benefits.
Despite the prospect for further confrontation on China's trade status, various trade analysts here predicted Solomon's efforts ultimately will fail, although Clinton may offer to step up U.S. protests of China's human rights record if the House adopts the motion.
Industry officials, meanwhile, applauded reports that Clinton will renew MFN for China.
"We can breathe a sigh of relief once again," said Jim Langlois, executive director of the National Apparel and Textile Association, Seattle, which represents firms sourcing apparel from the Far East. "MFN renewal for China is one of several risk factors for companies doing business there, but with Clinton's action last year, MFN [denial] is not as big of a concern for importers as it was, say, three years ago," Langlois said. More important today for companies sourcing or producing apparel in China is the ongoing cotton shortage--which ratchets up the price of these imports--and U.S. moves to cut China's apparel quotas for alleged transshipping violations, he added.
Peter Mangione, president of the Footwear Retailers and Distributors of America, said members of the group have been lobbying House members to dissuade them from supporting the expected Solomon motion.
"With nearly 60 percent of the footwear sold in the U.S. made in China, loss of MFN would have a devastating impact on consumers and retailers in this country. There is no replacing much of this footwear from other sources," Mangione said.
-- Fairchild News Service

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