Statement by Press Secretary Fitzwater on Continuation of China's Most-Favored-Nation Trade Status

The President informed the Congress today that he plans to extend China's most-favored-nation (MFN) status for another year. In making this important decision, the President stressed that it is wrong to isolate China if we hope to influence China.

Section 402 of the Trade Act of 1974 explicitly links eligibility for MFN to the important human rights issue of free emigration. Continuation of the current Jackson-Vanik waiver (and thus MFN trade status) will substantially promote freedom of emigration from China, as it has since 1979. China continues to permit the departure of citizens who qualify for a U.S. immigrant visa.

Although we have seen positive, if limited, developments in our human rights dialog, the President has made clear to the Chinese that their respect for internationally recognized human rights is insufficient. We are deeply disappointed in China's limited actions with regard to internationally recognized human rights and cannot describe our relations as fully normal until the Chinese Government effectively addresses these concerns. We want to elicit a faster pace and a broader scope for human rights improvements in China. Withdrawal of MFN would achieve neither of these objectives.

Short of fully normal relations, maintaining a constructive policy of engagement with China has served U.S. interests. In our bilateral relationship, we have used the tools available to achieve the foreign policy goals shared by the administration and the Congress. This has been true of our targeted use of 301 and Special 301 trade investigations and our vigorous enforcement of the law against prison labor imports and textile fraud. Our nonproliferation dialog also has been successful: China has acknowledged international nonproliferation standards by acceding to the Nuclear Non-Proliferation Treaty and declaring adherence to Missile Technology Control Regime guidelines. We are monitoring these commitments closely.

We have generated positive results without withdrawing MFN from China. Withdrawal of MFN would inflict severe costs on American business people, investors, and consumers. It would mean lost jobs and failed businesses in the United States and a multibillion-dollar surcharge on American consumers' imports. Our direct engagement with the Chinese is on the whole a successful policy. We intend to maintain it in order vigorously to protect American interests while we promote positive change in China.