China Trade Perk Extended : Bush Rejects Same Status for Soviets

President Bush set off a new row with Congress today by unconditionally renewing China’s most-favored-nation trade status for one year. He said it’s too early to talk about giving the same trade benefits to Moscow.

Despite China’s continued repression of the pro-democracy movement, Bush said, its emigration policies qualify it for the preferential trade treatment while the Soviet Union’s does not.

“I don’t think this is a reward to Beijing. I think it is very important we keep these commercial contacts,” said Bush, who announced what he described as a “difficult decision” at a White House news conference.

The move, which had been expected, still caused an uproar in Congress from members of both parties who consider the Administration’s China policy too accommodating to the current leaders in Beijing.

House Speaker Thomas S. Foley (D-Wash.) criticized Bush for failing to put any conditions on the one-year extension to prod China toward reforms.

“I think he faces some very severe problems here,” Foley said. “At the present time, I would say there are not the votes to approve it.”

And Senate Majority Leader George J. Mitchell (D-Me.) said Bush’s decision is “inconsistent with American values.”

Mitchell said he would “aggressively and vigorously” try to block Bush’s action.

Congress can do so only by enacting a “resolution of disapproval,” and such a measure was quickly introduced in the House. The resolution, if passed, could still be vetoed, thus it would take two-thirds majorities in both chambers to override Bush’s decision.

The President said his move “is not a special favor” to Beijing. “It is the basis of everyday trade.”

Bush’s China trade decision came less than two weeks before the first anniversary of the bloody June 4, 1989, Tian An Men Square crackdown.

“As we mark the anniversary of Tian An Men, we must realize that by maintaining our involvement with China, we will continue to promote the reforms for which the victims of Tian An Men gave their lives,” Bush said.

Most-favored-nation status gives China the same preferential trade treatment--including lowest-possible tariffs--that is extended to most major trading partners. China has had the status for 10 years.

Denial would send tariffs rising sharply on about $12 billion in annual imports from China of textiles, toys and other products.

The American Assn. of Exporters and Importers has estimated that removal of MFN status would have boosted tariffs on Chinese goods an average 40%.

Bush also said he does not wish to hurt the free-market economy of Hong Kong. About $8.5 billion in China-made products each year are re-exported by Hong Kong to the United States.

He said removing most-favored-nation status also could endanger the $6 billion in U.S. goods that China buys each year, including aircraft, wheat and chemicals.

While continuing the trade benefits to China, Bush said that it is premature to discuss bestowing them on the Soviet Union.