By  on March 16, 1994

WASHINGTON -- U.S. Trade Representative Mickey Kantor expressed optimism Tuesday about renewal of China's Most Favored Nation trade status.

On another trade front, he added that the administration plans to pursue Congressional passage this year of the GATT Uruguay Round treaty, despite some suggestions in Congress that this be held off until next year.

Regarding China, Kantor said he was "fully confident the U.S. can be successful in its approach" to secure improvements in human rights treatment by the Chinese government so that President Clinton can justify a request to extend China's trade status for another year. Clinton is expected to make a decision on China's trade status by June.

Kantor made his remarks in an appearance before the House Trade Subcommittee to discuss U.S. trade with Japan.

Reports out of Beijing last weekend that the U.S. was backing away from its insistence that China meet specific human rights goals as the price of MFN renewal "did not characterize the successes that the Secretary of State had there," Kantor said.

He noted that the U.S. had been successful in convincing China to lift tariff restrictions on some 450 products and that progress is being made in preventing illicit transshipping practices by the Chinese.

"It is not a disaster," Kantor said in response to questioning about U.S. trade negotiations with China. "There has been no change in our policy.

"Secretary of State Warren Christopher delivered a strong message that we must see progress on human rights. We have narrowed our differences somewhat with the Chinese, and I believe we are moving in the right direction."

Nevertheless, the reported softened trade stance with China is viewed by business as a positive step toward detaching human rights and trade.

Retailers and importers have argued they need assurance that the U.S. will continue its trade relationship with China so they can continue sourcing from China's low-wage and productive manufacturers. U.S. business executives also have maintained they want uninterrupted access to what is viewed as the world's largest market.

On GATT, Kantor said the administration planned to push for passage of its implementing legislation this year, and not next year, as an increasing number of Congressional members are saying should be done."It is in the best interests of the U.S. that the round be ratified this year," Kantor said. "The sooner the World Trade Organization is in effect, the sooner we can derive benefits from it."

Last week House Majority Leader Richard Gephardt (D., Mo.) said he preferred to see consideration of GATT postponed until 1995 because Congress was too busy this year with health care and welfare reform. Gephardt also said that in a tight budget year, it would be too difficult to also find the estimated $18 billion needed to make up for the tariff revenue that would be lost when GATT took effect.

Kantor said if the U.S. did not approve implementing legislation this year, it would be "of some concern internationally." He added that waiting until next year would not solve the financial problems of funding GATT because the U.S. "won't face a less difficult situation later."

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