Who Is "Most Favored"?

"Evenhandedness" is the Administration's motto for dealing with China and the Soviet Union these days. President Jimmy Carter and Security Adviser Zbigniew Brzezinski both recognize that Washington's announcement of diplomatic relations with Peking, plus next week's visit by Teng Hsiao-p'ing, provoked the Soviets to stall on a new SALT treaty and a summit meeting between Carter and Leonid Brezhnev. In Washington, the Cabinet-level Policy Review Committee on China has recommended that the President avoid any steps that could be construed as a "tilt" toward China at the expense of the Soviet Union.

The problem may soon lead to some difficult negotiations over East-West trade. At issue is most-favored-nation status (MFN), whereby a foreign country is able to export goods to the U.S. at much lower tariff rates. Actually, MFN is a misnomer, since over 95% of the U.S.'s trading partners enjoy that status. Only a handful of Communist countries, including China and the Soviet Union, face discriminatory tariffs that in some cases are double. The Soviet Union is barred from MFN by the Jackson-Vanik amendment to the 1974 trade bill, which links commercial opportunities for Communist governments to their policies of permitting emigration of their citizens. Before diplomatic recognition on Jan. 1, China had not actively sought MFN.

Both Moscow and Peking want MFN, along with U.S. export credits, in order to have freer access to American markets and to attract American investment. MFN could increase Soviet-American trade by an estimated 10%, and Sino-American trade still more. U.S. business generally supports trade preferences for both the Soviet Union and China, but Capitol Hill is in no mood to do Moscow any favors, given what many legislators see as Soviet mischief-making in Africa, the Middle East and Indochina. As for human rights, the number of people being allowed to emigrate from the Soviet Union is on the rise, but those who leave are a small fraction of those who apply. While China is by no means a liberal democracy, its dissident intelligentsia is far less visible and vocal than Moscow's. Indeed, Peking is probably willing to release more of its nearly 1 billion citizens than the rest of the world could possibly absorb. Thus it would be easier for Carter to extend MFN to China than to the Soviet Union. However, in the interests of evenhandedness, the Administration wants to seek MFN for China and the Soviet Union at the same time, and it would prefer to do so much later this year, after the Senate has decided whether to ratify the new SALT treaty. The White House figures that the ratification fight is going to be nasty, noisy and risky enough without the Senate's simultaneously debating Soviet treatment of dissidents.

But largely because of the groundswell of anti-Soviet feeling, Peking may have more friends on Capitol Hill these days than Moscow. Moreover, many legislators, like the Chinese, do not share the Administration's determination to protect SALT. The Peking leadership sees SALT as a trap into which the Soviets have lured the U.S. The principal sponsor of the 1974 amendment linking trade with emigration was Henry Jackson, who also happens to be both the leading opponent of SALT and proponent of closer ties with China. Thus the Administration faces the disagreeable possibility that Congress, skillfully lobbied by the Chinese, may impose its own tilt toward China, leaving the Soviet Union as a 'least-favored-nation."

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