The agreement was approved by Congress on January 24, 1980 (H.Con.Res. (5)

	Withdrawing or Restricting China's MFN Status

As long as China remains subject to the Title IV regime (see footnote 2), MFN status could be withdrawn fromChina, either permanently or temporarily, in one ofseveral ways: (1) by direct legislation enacted through regular legislative process (6) ; (2) by using the specific means provided in the Trade Act of 1974 for denyingMFN tariff status to a NME country that had it restored under that law, i.e., by the specific fast-track enactment ofa joint resolution disapproving the mid-yearannual renewal of the Jackson-Vanik waiver authority with respect to China, if such renewal is recommended bythe President; (3) by the President's failure torecommend such renewal with respect to China in the first place, for noncompliance with the Jackson-Vanikrequirements; or (4) by direct action by the Presidentsuspending or withdrawing China's MFN status. In the 105th Congress, joint resolutions disapproving the mid-year renewals of the waiver authority were introduced in both sessions but failed to be enacted,allowing the extension of the waiver and China's MFN status to remain in force through July 2, 1999. China's MFN status with the United States also could have been adversely affected by legislation, introduced but not passed, requiring prior congressionalapproval of U.S. support of China's admission to the WTO and the withdrawal of the United States from the WTOif China were to be admitted without U.S.support. In the 106th Congress, congressional action regarding China's MFN status --other than two failed annual attempts to disapprove the Presidents renewal of China'sfreedom-of emigration waiver--as in the preceding Congress, reflected to some extent the current action for China'sadmission to the WTO. United States'withdrawal from the WTO, on the other hand, would have had not only serious consequences for U.S.-China traderelations but even more serious consequencesfor the United States' leading role in overall international trade relations. Withdrawal of China's MFN status would result, in the first instance, in significant duty increases on about 95%of U.S. imports from China, totaling $99,580.5 million in 2000. Also likely to be adversely affected would beoverall U.S. economic relations with China,particularly U.S. investment and establishment of American businesses. Due to a large number of amendments--none of which was agreed to-- thedebate on the measure was protracted andthe vote on it was delayed to September 19, when it was passed by a vote of 83 to 15 and on October 10, 2000signed by the President (Title I, P.L. 106-286 ). (17)
Despite this opposition in Congress, the President, on June 1, 2001, renewed China's Jackson-Vanik waiver for one year (Presidential Determination 2000-16; 66FR 30631).
Particularly since--and to some extent despite--the Tiananmen Square incident of June 4, 1989, the U.S. Congress has considered two diametrically opposedtypes of action regarding China's nondiscriminatory, or most-favored-nation (MFN; normal-trade-relations) tariffstatus in trade with the United States. One hasbeen its total withdrawal, the other--of more recent origin--its extension on a permanent basis. After having beensuspended in 1951, China's MFN tariff statuswith the United States was restored in 1980 conditionally under Title IV of the Trade Act of 1974, includingcompliance with the Jackson-Vanikfreedom-of-emigration amendment, which must be renewed annually, and the existence in force of a bilateral tradeagreement between the two countries. Thisstatus would be either terminated or changed into a permanent one.
China's loss of MFN tariff status would result principally in the imposition of substantially higher U.S. customs duties on--and in higher, often prohibitive, costsof--over 95% of U.S. imports from China ($99,580.5 million total in 2000) and a likely cutback in such imports aswell as possible retaliatory reduction by Chinaof its imports from the United States. A significant economic disadvantage might result for Hong Kong and Macau,which, despite their political reunificationwith China, remain separate economic entities with permanent U.S. MFN status.
Sundry legislation introduced in earlier Congresses to withdraw or severely restrict China's MFN status failed to be enacted, in two instances for failure tooverride the President's veto. In the 105th Congress, legislation was introduced, but not passed, to grant permanentMFN status to China outright or upon itsaccession to the World Trade Organization. Some of the permanent-MFN bills would have placed additionalconditions or restrictions on the grant of the MFNstatus.
Legislation in the 106th Congress reflected China's prospective accession to the WTO. On one hand, it prohibited U.S. support of China's admission to the WTOwithout Congress's legislative approval and, moreover, in two instances required the United States to withdraw fromthe WTO if China was admitted to it withoutthe U.S. support. On the other hand, like in prior years, Congress failed to pass legislation disapproving thePresident's mid-year renewals of China'sJackson-Vanik waiver and, moreover, enacted legislation (Title I, P.L. 106-286 ) approving permanentnondiscriminatory status for China upon its accession to theWTO.
On January 30, 1998, the President extended the trade agreement with China for 3 years, and on June 1, 2001, renewed for one year China's Jackson-Vanik waiverand, thereby, its temporary nondiscriminatory status. Legislative action to disapprove the waiver renewal wasdefeated in the House.