U.S. asked to end MFN haggling

U.S. asked to end MFN haggling

BEIJING (AFP): Chinese Premier Li Peng has called on the United States to resolve China's Most Favored Nation (MFN) status "once and for all, " the state media reported yesterday.

The U.S. Congress annual review of whether to extend China's MFN is "short-sighted because the practice keeps U.S. businesses from planning for the future," Li told Ronald Woodward, president of the U.S.-based Boeing Commercial Aircraft Group.

The China Daily said the meeting took place Thursday.

The premier praised the U.S. business community but accused "some people" in the country of putting MFN an unfair light for political purposes.

Foreign Ministry spokesman Shen Guofang Thursday rejected statements by the acting U.S. trade representative that it would be "premature" to grant China permanent MFN status.

MFN "is an arrangement for normal trade relations ... it is not a favor but a commercial necessity," he said.

On Wednesday, U.S. Trade Representative designate Charlene Barshefsky said permanent MFN for China could "de-incentives" the country from working to improve market access, a necessary step for entry into the World Trade Organization (WTO).

Currently, the U.S. Congress votes each year whether to renew China's favored trade status.

Although the vote passes each year, the possibility of refusal has provided Washington with tremendous leverage in negotiations with Beijing on a variety of topics.

Loss of MFN, which is enjoyed by almost all of the United States' trading partners, would mean higher tariffs across the board for Chinese exports to the United States.