U.S., China to Resume Talks on WTO Entry

AUCKLAND, New Zealand —  The United States and China agreed Thursday to launch fresh negotiations on Beijing’s bid to join the World Trade Organization, talks suspended after NATO’s bombing of the Chinese Embassy in Belgrade, Yugoslavia, in May.

Speaking at a Pacific Rim economic conference that has been overshadowed by violence in Indonesia and the China-U.S. initiative, U.S. Trade Representative Charlene Barshefsky said “substantive” WTO negotiations will resume shortly.

Getting the world’s most populous nation into the club of trading nations is a long-standing goal of the Chinese and of the pro-trade Clinton administration. But any such proposal would face a colossal battle in the U.S. Congress.

The agreement to resume talks, reached in a late meeting with Barshefsky and her Chinese counterpart, Trade Minister Shi Guangsheng, set the stage for Saturday’s one-on-one meeting here between President Clinton and Chinese President Jiang Zemin.

The Clinton-Jiang meeting will take place on the sidelines of the annual Asia-Pacific Economic Cooperation, or APEC, forum.

Trade experts in Washington and elsewhere said a pact could be reached in as little as two weeks once formal negotiations resume. China’s accession to the WTO must also be approved by other nations, but the U.S. blessing is key.

China wants to join the global trade group by November, when the WTO launches a new round of trade negotiations in Seattle.

According to a recent study by the International Trade Commission, U.S. exports to China would probably increase initially by 10%, and China’s exports to the U.S. would grow by 7%, if China joins the group under the terms the two countries were discussing earlier this year.

That would have little impact on China’s $57-billion trade surplus with the United States and would add a relatively meager $1.7 billion to the U.S. economy. Advocates argue the commercial payoff would come in the longer term as China’s economy grows and its huge market becomes more accessible to U.S. firms.

“Minister Shi and I agreed to work jointly to resolve outstanding issues as soon as possible,” Barshefsky told reporters. “We did not establish any specific timeline, but I do think that the discussion underscored the desire to reengage in substantive discussion.”

Though the 21-nation APEC gathering in Auckland has no official voice in either the WTO talks or the genocide taking place on the neighboring island of East Timor, Indonesia, both events are enormously important to the APEC agenda.

Indonesian President B.J. Habibie, expecting nonstop criticism from protesters over his military’s alleged role in the mass slaughter, bowed out of the five-day meeting. This followed an earlier, unrelated announcement by Malaysian Prime Minister Mahathir Mohammad that he too would not attend.

East Timor also colors the U.S.-China talks on the WTO.

China opposes putting East Timor on the APEC agenda, and that has strained relations with some other APEC members, whose support China may need for WTO accession. Beijing is concerned, analysts say, that a United Nations decision to send troops into the strife-torn island without Jakarta’s approval could serve as a model for similar action in Tibet or another Chinese-held area.

“From China’s point of view, it’s very obvious that endorsing something like this would create an enormous precedent,” said Paul Clark, a China specialist at the University of Auckland.

China’s WTO entry also hit early turbulence over an APEC plan to support simultaneous entry into the trade organization for Taiwan. Beijing has scotched that initiative as well, analysts say, this time over concerns that the world might view China and Taiwan as being on equal diplomatic footing. China considers Taiwan a renegade province.

Other gaps were exposed Thursday, as members bickered over the structure of future WTO talks and the posture Asian nations should take in the upcoming Seattle round of negotiations.

Although many of APEC’s members are emerging from Asia’s two-year economic crisis, the long-term outlook for the group is unclear as it confronts a number of political, economic and social strains.

After early bold calls for a regional free-trade area for richer nations by 2010 and developing countries by 2020, the group has done little to reduce barriers and otherwise assemble the building blocks needed to get there.

Critics say APEC’s unwieldy structure and dependence on consensus make dramatic progress unlikely. It has no regulatory framework to enforce agreements among its members, unlike the WTO. Supporters counter that such an ambitious goal involving half the world’s population and economic output can’t be completed overnight.

That said, East Asians find themselves in no mood this year to lower barriers or endure more painful competition while their wounds from the two-year Asian economic crisis are still raw.

This widens the gap between many East Asian countries on one side of the table and what some Asians refer to as the “Anglo-Saxons”--Canada, Australia, New Zealand and the United States--in favor of faster progress, on the other.

The United States in particular is strong and confident after years of vibrant economic growth, record stock market gains and corporate leadership in key high-tech and information industries--conditions that make the liberalization pill much easier to swallow.

“The U.S. is more aggressive and tries to get APEC to be more like the WTO with binding rules,” said Takeshi Jingu, Asian research director with the Nomura Research Institute. “But it hasn’t worked.”

In some ways, however, APEC’s divisions have been there since the start. A major reason Washington agreed to support APEC in the first place, diplomats say, was its desire to kill an alternate proposal by Malaysia that would have created an Asia-only economic group. Washington was wary of any alliance that would further strengthen Japan’s already strong negotiating position.

Since then, the group has become even larger and more diverse, ranging from China with 1.2 billion people to Brunei with 310,000, and from the United States with an $8.1-trillion economy to Papua New Guinea with $5 billion.

“In APEC, as the number of participants goes up, the decision-making slows,” said Masami Yoshida, senior research fellow with the Sumitomo Life Research Institute.