By  on February 9, 1994

WASHINGTON -- The Clinton administration began moving aggressively Tuesday to spur Capitol Hill action on two trade fronts: China's trade status and consideration of the Uruguay Round.

In the House, it was announced that a bipartisan group of members, led by Rep. Robert Matsui (D., Calif.), will seek support for extension of China's Most Favored Nation status. Meanwhile, on the other side of the Capitol, U.S. Trade Representative Mickey Kantor prodded the Senate Finance Committee to wrap up legislation for the Uruguay Round before yearend.

Both trade items could be before Congress by spring, and neither are ensured smooth passage.

The recently completed Uruguay Round agreement faced considerable criticism Tuesday from the Senate Finance Committee. Chairman Sen. Daniel P. Moynihan (D., N.Y.) complained to Kantor during a hearing that the committee already had a full agenda with health care and welfare reform.

Sen. John Danforth (R., Mo.) complained that industrial subsidies permitted in the new agreement amount to an industrial policy. Then, Sen. Bob Packwood (R., Ore.) presented a letter to Kantor signed by 20 Republican senators saying they would not consider GATT until the estimated $11 billion tariff loss under the agreement was paid for in the current budget proposal.

Kantor insisted the implementing legislation be considered as soon as President Clinton submits it to Congress. Under fast-track rules, the President can't submit the legislation to Congress before April 15. Kantor also said the administration was looking for ways to pay for the lost tariff revenue. Last week he said the administration would not raise taxes to pay for GATT.

In the House, support is growing for continuing China's MFN, Matsui said in a speech before the Business Coalition for U.S.-China Trade. The upcoming debate will depend on how actively U.S. business officials educate members of Congress on the importance of China trade, Matsui said.

"Over the next few months, I hope you'll urge your clients operating in China to tell the Chinese government to fulfill President Clinton's executive order of June 1993," Matsui told the group. That order called for improvements in human rights as a condition of extending MFN."Business's main thrust must be to explain to members the consequences of losing MFN -- an increase in tariffs and a two-way trade war involving $35 billion in merchandise."

Even though he heads the coalition, Matsui is not uncritical of the administration. He said its policy toward China is "muddled, confused and has some inconsistency to it," because while the U.S. is threatening trade sanctions, it is seeking cooperation from China in opening up North Korean nuclear sites to inspection.

In concert with Matsui's group -- which includes Reps. Jim Kolbe (R., Ariz.), David Dreier (R., Calif.), Jim McDermott (D., Wash.), Jim Leach (R., Iowa), Lee Hamilton (D., Ind.) and Mike Kopetski (D., Ore.) -- the administration is seeking alternatives to yearly MFN extensions. Options being considered, Matsui said, include a China accession to GATT -- an approach not favored by USTR; creation of a binational commission to monitor human rights or creation of incremental trade sanctions.

China's MFN expires June 3 and Clinton is expected to decide in May whether to ask Congress for an extension of the trade privileges.

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