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Incident May Cause Review Of China’s MFN Trade Status

By Elaine S. Povich

Administration officials and members of Congress, treading cautiously, Thursday held out the possibility of retaliating against China for its holding of a U.S. spy plane and its American crew members.

While emphasizing that the situation was still fluid and expressing the hope that the crew and plane would be returned soon, leading foreign affairs experts in Congress suggested trade relations with China could suffer. They also said the situation has strengthened the hand of those who would like to sell sophisticated military weapons to Taiwan -- something China strenuously opposes.

White House spokesman Ari Fleischer noted that President Bush has, in the past, strongly supported normal trade relations with China. But now, Fleischer said, “the president is taking things one step at a time.” While Fleischer did not say that Bush would oppose such a trade relationship, the language indicated Bush is cooler on the idea than he has been.

Bush himself said the United States’ relationship with China “is very important. But they need to realize that it’s time for our people to be home.”

In June, the administration and Congress may have to decide whether to extend Most Favored Nation trade relations with China if negotiations over China’s participation in the World Trade Organization are not completed.

“We will discuss Taiwan (weapons), and WTO and MFN (normal trade relations), the Olympics, and the list goes on and on,” said Sen. Richard Lugar (R-Ind.), a senior member of the Senate Foreign Affairs Committee. China is bidding to host the Olympics in 2008.

In the past, business interests pressing for free trade with China have won out. But now, said Lugar, “it is not clear that trade interests in this particular case would prevail.”

Sen. Charles Grassley (R-Iowa), a strong supporter of permanent normal trade relations with China, said that by their actions the Chinese “are making it possible for a very close vote last summer in the House of Representatives to be reversed.”

The House voted 237-197 on May 24, 2000, to extend normal trade to China. House Minority Leader Richard Gephardt, who opposed normal trade relations with China, nonetheless said Thursday that “if this situation does not get resolved with China, then all of our relationships and policies will come into question.”

Lugar and Sen. John McCain (R-Ariz.) noted American public opinion is often instrumental in deciding the course of relationships with foreign nations.

“This could put a strain on all of our relations, ranging in every aspect of our relationship,” McCain said. “That strain, or tension, is directly related to the amount of time it takes to resolve this. Don’t neglect American public opinion when Americans are being held captive and being interrogated, apparently.”

Several groups of senators and members of Congress are reconsidering plans to visit China during Congress’ recess in the next two weeks. A House delegation led by Rep. David Dreier (R-Calif.) focusing on technology may eliminate China from the list of nations planned for visits, and a Senate group led by Sen. Phil Gramm (R-Texas) will make a decision mid-trip on whether to go to China from Korea, a spokeswoman said.