US Backs China Entry to WTO As Quid Pro Quo for Market Access

By , Staff writer of The Christian Science Monitor

THE United States endorsement of China's entry into the World Trade Organization (WTO) signifies the end of another testy period in the often volatile relations between the two economic giants.

US Trade Representative Mickey Kantor announced in Beijing yesterday that the two sides would resume talks in mid-April on China's bid to enter the new trade organization.

Although Chinese officials often seemed uncomfortable and even surly during Mr. Kantor's three-day stop in Beijing, the American trade negotiator and his tough-minded Chinese counterpart, Foreign Trade Minister Wu Yi, put commercial ties back on track:

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*China agreed to end its suspension of a 1992 memorandum on market access, easing import restrictions on American farm products such as cherries and apples and clearing the way for more US business deals in the fast-growing Chinese market.

*The US will back China's bid to become a founder WTO member, a cherished goal of senior Chinese leaders that is still possible on a retroactive basis, and reopen talks on China's demand for exemptions from strict WTO trade rules.

*The two sides formalized an agreement providing for greater Chinese efforts to fight copyright piracy and opening up the market to American music, film, and software companies.

*China will allow greater market access for American telecommunications and insurance companies -- service sectors which are key to US export growth.

*Officials from the two countries agreed to extend a seven-year accord on satellite launching services which limits the number of major payloads allowed to be launched by China and blocks Beijing from undercutting rivals with low fees, government inducements, and other unfair trade practices.

The latest agreements show Beijing and Washington are chipping away at trade barriers that limit American businesses from expanding into China and have restrained China from having a bigger role in world trade.

Commercial ties, the cornerstone of American policy since the Clinton administration de-linked trade and human rights last year, soured in December when an enraged China failed to win admission to WTO's predecessor organization and blamed the US for demanding greater market access and setting tougher entry standards for China.

The mood dipped further when Washington announced trade sanctions to punish rampant copyright piracy in China and Beijing vowed to retaliate. After cliff-hanger negotiations in late February, China pledged stricter copyright enforcement and averted a bruising trade war between the two countries.

''What we have done is an important and helpful step forward for American and Chinese relations, but we still have a long way to go,'' Kantor said at a press conference yesterday.

Still, the upswing on trade doesn't mask continued tensions between the two countries over Chinese human rights abuses and international weapons sales and American support for Taiwan, considered as part of China by Beijing. As in other recent US trade missions, the human-rights issue was a mere footnote to commercial talks, though Kantor said he raised the issue in a meeting yesterday with President Jiang Zemin.

After threatening last year to withdraw China's low-tariff trade privileges due to human rights abuses, President Clinton retreated in the face of stiff US business opposition and severed the link between China trade and human rights.

This month China narrowly averted an embarrassing censure for its human rights record when a critical US-backed resolution was turned down at the annual United Nations Human Rights Commission session in Geneva.

Nor do the agreements and new warmth likely mean the end of trade confrontations between the two giant economies, Western analysts say. The US still faces a hefty trade deficit with China, which Kantor said the new agreement should begin to trim. ''As China's economy continues to grow and challenge US economic dominance, further skirmishes are inevitable,'' says a European diplomat.

Ahead are negotiations to resolve differences over China's entry into WTO. The two governments are at odds over China's demands to join the world trade mainstream with developing nation status, which would give Beijing more time and leeway in meeting WTO standards in reforming the economy.

Although Kantor pledged to be ''realistic and flexible'' in discussing China's demands for WTO entry, the US wants to define individually the sectors of the Chinese economy that qualify for developing country status.

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