U.S., China extend trade talks

Progress slow on Beijing's bid to enter WTO

Asia

November 13, 1999|By Frank Langfitt | Frank Langfitt,SUN FOREIGN STAFF

BEIJING -- In a surprise move, the United States and China are extending talks into a fourth day in an attempt to break the stalemate over Beijing's bid to enter the World Trade Organization.

"While progress has been slow thus far, because of the importance of the issue, both sides thought it would be useful to have an additional day of meetings," U.S. Trade Representative Charlene Barshefsky said in a statement released in Washington.

Yesterday, Barshefsky had sounded pessimistic, saying no progress had been made. The U.S. trade delegation had been scheduled to return to Washington today.

Barshefsky met nearly an hour and a half yesterday with Shi Guangsheng, China's foreign trade minister. Chinese officials were unavailable for comment and the state-run Xinhua news service remained mute on the subject last night.

Barshefsky came to Beijing this week for what has been seen as a last-ditch effort to bring China into the WTO before it meets in Seattle at the end of the month. After the "Seattle Round," as it is known, the 134-member WTO is expected to make the requirements for entry more stringent.

A WTO agreement with China would give the United States and other countries much greater access to the world's largest market of potential consumers while giving Beijing a say in setting the rules of global commerce.

The WTO enforces trading rules for its members and tries to lower trade barriers around the world. A seat in the WTO is the commercial equivalent of a seat in the United Nations. The Clinton administration sees Chinese entry into the WTO as part of a broader strategy to draw China into the membership of international institutions where conflicts can be resolved in rules-based systems. One of the major sticking points for an agreement between China and the United States is thought to involve access to China's service sector, including the banking and telecommunications industries.

Chinese Premier Zhu Rongji went to Washington in April offering what many saw as a generous deal. It would have cut Chinese tariffs and allowed Western businesses to invest heavily in the telecommunications and insurance sectors here. Under pressure from unions concerned about job losses and politicians angry about allegations of Chinese spying, President Clinton rejected the offer.

The next month, NATO planes bombed the Chinese Embassy in Belgrade, Yugoslavia. NATO said the bombing was an accident. China insisted that it was deliberate and broke off all high-level diplomatic contact with the United States.

After a cooling-off period, WTO talks began again this fall.

The negotiations come at a difficult time for China. In 1997, Chinese leaders vowed to lay off millions of workers and radically restructure the nation's failing state-owned businesses in an attempt to reform its economy.

In the past year, though, labor unrest and fear of mass unemployment have persuaded leaders to scale back their ambitions.

Some officials fear that membership in the WTO would unleash a wave of foreign competition which could bury many of China's inefficient state-owned firms.

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