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Automakers Urge Normal Trade Status for China

22 July 1998

Automakers Urge Congress to Affirm Normal Trade Status for China

     WASHINGTON, July 21 -- Stating that maintaining normal
trading relations continues to be the best way to improve relations with China
and strengthen U.S. economic interests at home and abroad, the American
Automobile Manufacturers Association (AAMA) is urging the U.S. House of
Representatives to affirm China's normal trade status.
    "With the economies of Asia in a fragile state, denying most-favored
nation (MFN) status to China would be more detrimental to U.S. interests than
ever before," AAMA President & CEO Andrew H. Card, Jr. explained in a letter
to Members of Congress.  If Chinese goods are denied access to the U.S.
market, they will be redirected to other markets.  This would displace goods
from China's neighbors and imperil those countries' efforts to recover from
their own currency devaluations and weak domestic demand.  "So far, the impact
of the Asian financial crisis on the U.S. economy has been relatively
limited," Card wrote. "However, denying normal trading status to China would
create an unnecessary element of instability with unpredictable consequences
for the U.S. economy."
    Lawmakers soon are expected to consider a resolution to overturn the
President's decision to continue normal trade relations with China for another
year.  But Card wrote that, "denying MFN has never been proven to be an
effective instrument for encouraging positive political change in China.
China's market eventually will begin to expand again and it is important to
our nation's global competitiveness that Americans have the opportunity to
participate in that growth.  Revoking MFN would obstruct that opportunity,
with adverse consequences for the U.S. economy."
    AAMA is the trade association whose members are Chrysler Corporation
, Ford Motor Company and General Motors Corporation
.  Visit AAMA's site on the World Wide Web at http://www.aama.com.