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Congress Moves to Alter China's MFN Status

THE favorable tariffs that have kept alive China trade since the June 1989 Tiananmen Square crackdown were renewed last week by President Bush. But the decision has steered toward another political test of his policy of not cutting China off from Western contact.

Some attempts to alter China's most-favored-nation tariff status began taking shape in Congress before the chambers emptied for Memorial Day recess.

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The initiatives move in two general directions. One is to block the president's decision, revoking most-favored-nation (MFN) status from China. The other is to alter the law granting MFN status so that China will not qualify next year without meeting some human-rights standards.

One administration official indicated that the White House may negotiate with Congress for some tougher standards.

Strictly speaking, the White House probably does not need to negotiate at all. The tariff decision stands unless Congress passes a resolution to block it. The votes are probably ready to do that, but probably not to override Bush's veto of the resolution.

Some sentiment runs through Congress to force Bush into a veto so that he must defend an unpopular policy.

The only human rights standard that now applies to MFN tariffs is that a nation must allow free and fair emigration. This standard is aimed at the Soviet Union, which has yet to liberalize emigration to MFN requirements.

If China were to lose MFN, tariffs for exports to the US would rise from an average of about 8 percent to roughly 50 percent. Most analysts project a devastating impact on Chinese export industries under tariffs that high.

Even within the White House, debate was strenuous on the subject. One argument against renewing MFN was that its unpopularity in Congress would jeopardize other parts of the administration's legislative agenda.

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One question now: Will the Chinese respond with some loosening of repression?

``Conceivable,'' says Paul Kreisberg of the Carnegie Endowment for International Peace. ``The Chinese style tends to be: You do something and then I will do something. ... The president has done something they see as very important.''

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