New stand 'could help MFN'

THE pro-free trade stance taken by Bill Clinton over the debate on the North American Free Trade Agreement (NAFTA) could help China keep its Most Favoured Nation (MFN) status for another year, lobbyist John Kamm said.

Speaking after a seminar on Sino-US relations held in Hong Kong yesterday, Mr Kamm said the NAFTA debate had pushed Mr Clinton into a ''free trade mode''.

''He [Clinton] has gotten used to fighting for free trade and the people who backed him on this are going to be susceptible to the same arguments, that is pro trade arguments on MFN, as they are on NAFTA,'' Mr Kamm said.

''So I think on balance if NAFTA passes, it will be good on the upcoming MFN debate.'' But Mr Kamm cautioned that it would be premature to predict an easy road to MFN renewal next year.

Another speaker at the seminar, Jeff Muir, said although the MFN debate remained the most controversial issue, China and the US were divided over dozens of trade agreements.

For example, Mr Muir said unless Beijing and Washington were able to reach an agreement on textiles before the December 31 deadline, bilateral trade could be severely hit.

He said there would be ''significant collateral damage'' spanning industries such as textiles, insurance and shipping.

Other major differences included areas such as market access, trade deficit, intellectual property violation, and China's membership of the General Agreement on Tariffs and Trade (GATT), according to Mr Muir.

Although these issues were likely to be raised in tomorrow's summit between Mr Clinton and his Jiang Zemin in Seattle, Mr Kamm did not expect any major breakthroughs.

He said a speedy conclusion of an agreement for the Red Cross to have access to Chinese prisons could yield more support in the US Congress.