[Congressional Record Volume 142, Number 82 (Thursday, June 6, 1996)]
[Senate]
[Page S5949]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          NORMAL TRADE STATUS

 Mr. BAUCUS. Mr. President, Senators Roth, Moynihan, and Chafee 
and I will soon introduce a bill to solve a small but serious problem 
that has plagued our trade policy for years--the fact that most favored 
nation or MFN status does not mean what it says.
  Let me offer an analogy that may illuminate the difficulties this 
creates. In Greek myth, the gods punish King Sisyphus of Corinth, for 
various sins and repeated attempts to cheat death, by making him push a 
heavy stone up a hill for eternity. Each time he gets to the top, it 
rolls back down and he has to start again.
  Our experience with MFN tariff status is somewhat similar. Each year, 
we have to convince the public that MFN status does not really mean 
``most favored nation'' status, but simply the same tariff rate that 
applies to most countries.
  This year is a good example. We will soon debate the President's 
decision to renew MFN status for China. We will soon, I hope, pass 
bills to grant Bulgaria and Cambodia permanent MFN status. And we may 
also take up a bill to grant permanent MFN status to Romania.
  Obviously, logic tells us that these countries cannot all be 
America's favorite country at one time. And sound diplomatic practice 
would avoid ranking any single country as our favorite. Yet we can 
excuse the millions of Americans who do not follow the arcana of trade 
laws and agreements if they conclude that, somehow, Congress is 
attempting to anoint Bulgaria, Cambodia, China, and Romania as our 
favorite country all in the very same year.
  The truth is, of course, that we are attempting no such thing. MFN is 
the normal tariff status we in the United States apply to most of our 
trading partners. Under the Uruguay Round, it is a tariff level 
averaging around 4.5 percent. Often, in fact, tariffs fall well below 
this MFN rate because of free trade agreements and special arrangements 
with developing countries. So MFN is not even the best available tariff 
rate. It has nothing to do with favoritism.
  Yet to this day, many people oppose MFN status for China because they 
believe it is a kind of special favor. The term is simply misleading 
and wrong. And it is extremely frustrating to explain it each year, 
only to have to start explaining it again a few months later. It is a 
longstanding, needless complication in our trade policy.
  This year, we could push the metaphorical MFN stone up the hill once 
again and hope that, this time, it stays at the top. But unlike 
Sisyphus, we have another choice. We can just push the stone into a 
lake and get rid of the problem for good.
  That is what our bill will do. It will delete the term ``most favored 
nation status'' from our trade laws, and replace it with ``normal trade 
relations.''
  That will not change our tariff and trade policies in any way. But it 
will bring our terminology in line with reality. Thus, it will make our 
policies more comphensive to the public and avoid needless arguments. 
It is good common sense, and I hope it will get the Senate's 
support.

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