Friday, May 15, 2020

USA Granted China Most Favored Nation and was signed into law by President Clinton on October 10, 2000

USA granted China Most Favored Nation and was signed into law by President Clinton on October 10, 2000.
United States[edit]
AllPolitics - Most Favored Nation? - June 23, 1997
In the 1990s, continued "most favoured nation" status for the People's Republic of China by the United States created controversy because of its sales of sensitive military technology and China's serious and continuous persecution of human rights.[6] China's MFN status was made permanent on December 27, 2001. All of the former Soviet states, including Russia, were granted MFN status in 1996. On a bilateral level, however, the United States could not grant MFN status to some members of the former Soviet Union, including the Russian Federation, because of the Jackson-Vanik amendment. This presented an obstacle to those countries' accession to the WTO.[7] At the urging of Vice President Joe Biden,[8] the Jackson-Vanik amendment was repealed with Magnitsky Act (which attempts to punish human rights violations without hampering trade) on December 14, 2012.[9]
In 1998, the "most favoured nation status" in the United States has been renamed "permanent normal trade relations" (NTR) as all but a handful of countries had this status already. The country gives preferential treatment to some of its trading partners without this status. This is based on the U.S. Supreme Court interpretation of MFN principle as a mere prohibition to enact discriminatory legislation concerning duties on goods of like character imported from an MFN partner.[10] The court ruled that MFN does not constrain the U.S. from giving out special privileges to other countries.
The ideas behind MFN policies can first be seen in US foreign policy during the opening of Japan in the mid to late 1850s, when they were included as a clause in the Commercial Treaty of 1858, which signalled the opening of the Japanese market.
Since 1998, the term normal trade relations (NTR) has replaced most favoured nation in all U.S. statutes. This change was included in section 5003 of the Internal Revenue Service Restructuring and Reform Act of 1998 (P.L. 105-206). However, Title IV of the Trade Act of 1974 (P.L. 93-618) established conditions on U.S. MFN/NTR tariff treatment to certain non-market economies, one of which is certain freedom-of-emigration requirements (better known as the Jackson-Vanik amendment). The act authorizes the president to waive a country's full compliance with Jackson-Vanik under specified conditions, and this must be renewed by June 3 of each year. Once the president does so, the waiver is automatic unless Congress passes (and avoids or overturns a presidential veto of) a disapproval resolution.
MFN/NTR status for China, a non-market economy, which had been originally suspended in 1951, was restored in 1980 and was continued in effect through subsequent annual Presidential extensions. Following the massacre of pro-democracy demonstrators in Tiananmen Square in 1989, however, the annual renewal of China's MFN status became a source of considerable debate in the Congress; and legislation was introduced to terminate China's MFN/NTR status or to impose additional conditions relating to improvements in China's actions on various trade and non-trade issues. Agricultural interests generally opposed attempts to block MFN/NTR renewal for China, contending that several billion dollars annually in current and future U.S. agricultural exports could be jeopardized if that country retaliated. In China's case, Congress agreed to permanent normal trade relations (PNTR) status in P.L. 106-286, President Clinton signed into law on October 10, 2000.[11] PNTR paved the way for China's accession to the WTO in December 2001; it provides U.S. exporters of agricultural products the opportunity to benefit from China's WTO agreements to reduce trade barriers and open its agricultural markets.
In contract law[edit]

most favoured nation clause (also called a most favoured customer clause or most favoured licensee clause) is a contract provision in which a seller (or licensor) agrees to give the buyer (or licensee) the best terms it makes available to any other buyer (or licensee). In some contexts, the use of such clauses may become commonplace, such as when online ebook retailers contract with publishers for the supply of e-books.[13] Use of such clauses, in some contexts, may provoke concerns about anticompetitive influences and antitrust violations, while in other contexts, the influence may be viewed as procompetitive.[14]
One example where most favoured nation clauses may appear is in institutional investment advisory contracts, where if a certain number of conditions are met, one client may be entitled to the lowest fee offered to other clients with a substantially identical investment strategy and the same or lower level of assets under management.[15]
The most favoured nation clause can also be included in an agreement between a state and a company or an investor. This involves the provision of special privileges and advantages although the state cannot use contractual mechanisms to avoid its MFN treatment obligations with other countries.[16] Unlike the relationship among states where a nation accorded an MFN status cannot be treated less advantageously than another, the host nation does not breach MFN treatment if it provides different privileges to different investors. The United Nations Conference on Trade and Development clarified this when it stated that "a host country cannot be obliged to enter into an individual investment contract" and that "freedom of contract prevails over the MFN standard."[17] This general principle, however, is not absolute.[16]
This article appears to contradict the article Permanent normal trade relations. Please see discussion on the linked talk page(August 2009) 

  • MFN requires that a country act fairly with all WTO member countries, extending the same privileges and immunities granted to one country to all members.
  • MFN advocates for non-discriminatory trade policy, ensuring equal trading among all WTO member nations.
  • Nations designated as developing by the WTO receive special consideration from the U.S.