China As Most Favored Nation

What is the debate on weather or not China should retain favored-nation trading status all about? Is it really a decision on what is best economically for the United States, and China.

Or is it: the issue of Chinese human rights violations and the fact that if the United States where to revoke the favored nation status of China it would have a profound negative impact on the U.S. economy alone.

(+)Most-favored-nation trade status started in the United States as a version of the European preferential trade system. The Carter Administration first granted most-favored-nation trading status to China in 1980, following the historic efforts of President Nixon during the 1970’s to restore diplomatic ties. Historically, a significant difference existed between the unconditional most-favored-nation clause in European trade law and the American version of conditional most-favored-nation. Under unconditional most-favored-nation status, one country's extension of tariff concessions guarantees the same concessions to all nations associated with it through commercial treaties. American conditional most-favored-nation status provided treaty signatories only the opportunity to negotiate most-favored-nation status when most-favored-nation status was extended to another trading partner. Thus meaning that the United States gives significant economic advantages to one nation in the form of most-favored-nation trading status.

Under the Trade Act of 1974, most-favored-nation status could only be granted to China through a Sino-American bilateral commercial agreement and satisfaction of the Jackson-Vanik Amendment requirements. The Jackson-Vanik amendment states that the President of the United States may grant a communist country such as China most-favored-nation trade status if it was in conjunction with a trade agreement and upon proper improvement that China would permit emigration. Also China would have to satisfy that they are moving toward improving current policies. The conclusion of the US-PRC commercial accord in July 1979, and the initial waiving of the Jackson-Vanik requirements, and with Congressional approval, most-favored-nation status was granted to China. This action sealed the successful efforts of the Carter Administration to create social and economic ties through Sino-American relations.

The renewal of China’s most-favored-nation trade status has been s...

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...t-favored-nation status. By giving stats and other figures that show just how this issue has the ability to effect the economies of both the United States and China.

Works Cited:

(-)Morrison, Wayne M. “91121: China-U.S. Trade Issues” Updated November 27, 1996 <a href="http://www.fas.org/man/crs/91-121.htm#summ">http://www.fas.org/man/crs/91-121.htm#summ

(+)Robertson III , Grayson R “The China-MFN Controversy: The Case For Maintaining China's MFN Status Part 1” <a href="http://www.china-net.org/CCF94/ccf9409-3.html">http://www.china-net.org/CCF94/ccf9409-3.html

(=)“MARKET ACCESS AND PROTOCOL COMMITMENTS” <a href="http://www.ustr.gov/releases/1999/04/ch-memo.html">http://www.ustr.gov/releases/1999/04/ch-memo.html

Delay, Tom “China-U.S. Trade Issues” <a href="http://www.majoritywhip.house.gov/China/980717CRSTradeRelations.asp">http://www.majoritywhip.house.gov/China/980717CRSTradeRelations.asp

Faison, Seth "U.S. And China Reach Late Agreement on Textiles," New York Times, February 3, 1997 <a href="http://www.mtholyoke.edu/acad/intrel/chintex.htm">http://www.mtholyoke.edu/acad/intrel/chintex.htm