does china still have most favored nation status?

Particularly since–and to some extent despite–the Tiananmen Square incident of June 4, 1989, the U.S. Congress has considered two diametrically opposed types of action regarding China’s nondiscriminatory, or most-favoured-nation (MFN; normal-trade-relations) tariff status in trade with the United States. Both have been the complete withdrawal of China’s MFN tariff status with the United States, while one has been its extension on an ongoing basis. After having been suspended in 1951, China’s MFN tariff status with the United States was restored in 1980 conditionally under Title IV of the Trade Act of 1974, including compliance with the Jackson-Vanik freedom-of-emigration amendment, which must be renewed annually, and the existence in force of a bilateral trade agreement between the two countries. It could either be discontinued or converted into a permanent status. [2]

Law prohibits the United States from granting MFN status (Majority First Nation) to communist countries without free-market economies. It is prohibited for the United States to grant MFN status to communist countries that do not have free-market economies. Practical effect is that imports Tarifes are much higher for these countries. The Trade Act of 1974 was amended to create a loophole. A communist country that allows free emigration may allow the president to waive the MFN restrictions on an annually basis. Each year, Congress must be informed by the president of any plans to extend or reduce MFN status to communist countries. The Congress would need a majority of two-thirds to reverse a Presidential VETO. It has 60 days to repeal the decision. For the heads-up, thanks to Santia cope of Casablanca in Morocco. [3]

According to CRS Report 98-603 for Congress, “China’s Most-Favored-Nation (MFN) Status: Congressional Consideration, 1989-1998:” After the Tiananmen Square protests in 1989, there was enough opposition to granting MFN status to China that the “House passed joint resolutions disapproving MFN for China in both 1991 and 1992,” but the Senate didn’t pass the joint resolution. However, the real focus of the debate was not whether to deny MFN status for China altogether, but whether or not to “place new human rights conditions on China’s MFN eligibility.” Congress passed legislation in 1991 and 1992 that would have placed further conditions on China’s MFN status, but President Bush vetoed the legislation. We are grateful to Truly Jean, Novosibirsk (Russia) for the latest revision. [4]