[Congressional Record Volume 142, Number 98 (Friday, June 28, 1996)]
[Senate]
[Pages S7298-S7299]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       LEGISLATION REGARDING THE TERM ``NORMAL TRADE RELATIONS''

  Mr. CHAFEE. Mr. President, yesterday I joined with Senators Roth, 
Moynihan, Baucus, and others on the Finance Committee in introducing a 
measure that will clarify and emphasize the true meaning of most-
favored- nation [MFN] trading status--a misnomer if there ever was one. 
This is a change I long have advocated, and I hope the Senate will move 
quickly to approve this legislation.
  Since 1989, MFN has gained notoriety as a special favor, a boon, that 
we grant to other nations. Yet nothing could be further from the truth. 
MFN denotes a concept used by trading nations that has been around 
since the 12th century. That concept is simple:

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No nation shall be granted trade treatment less favorable than that 
granted to the most favored nation. In other words, no playing 
favorites. Every nation is to be treated equitably, without 
discrimination, when it comes to the terms of trade.
  Thus, the concept represents the lowest common denominator of trade 
status--the basic treatment that all receive.
  Over time, however, this concept came to be known not as, say, 
``nondiscriminatory treatment'' status, or ``least favored nation'' 
status, but as ``most favored nation'' status. This unfortunate 
terminology has fostered the mistaken view that MFN is a special 
treatment granted only to a privileged few. In fact, just the opposite 
is true: MFN, as the basic trading status between nations, is granted 
to virtually all nations with whom the United States trades. The 
exceptions can almost be counted on one hand: Serbia, Laos, 
Afghanistan, Vietnam, Cuba, North Korea, and Cambodia. I might add that 
Cambodia is about to come off that already meager list, if legislation 
now pending in Congress is approved.
  So while the concept of MFN is sound, the term used to denote that 
concept is misleading and has resulted in a good deal of mischief--a 
fact that Senators Moynihan and I have lamented often during Senate 
Finance Committee hearings. It is time that we called the MFN 
nondiscrimination concept by a term that more accurately represents its 
meaning.
  Therefore, I am joining with Chairman Roth, Senator Moynihan and all 
of my Finance Committee colleagues to amend U.S. law, where 
appropriate, to replace the term MFN with the term ``NTR:'' normal 
trade relations. From this point on, we will discuss legislation and 
hold debate on the nondiscrimination concept using the term NTR in 
place of MFN.
  With the concept of MFN remain the same? Yes. Are we signaling a 
change in domestic policy, or modifying our international obligations 
in any way? No. But we are making perfectly clear to everyone the true 
meaning and purpose of this centuries-old concept. And it is my hope 
that our legislation will result in a better understanding of 
international trade relations, both here in the Congress and in the 
eyes of the public.

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