-Caveat Lector-

U.S., China Can't Reach Trade Deal

By MARTIN CRUTSINGER
.c The Associated Press

WASHINGTON (AP) -- The United States and China failed to strike a final deal
Thursday for clearing China's entry to the World Trade Organization but found
accord on opening China's markets to some U.S. farm products and more airline
flights.

Both President Clinton and Chinese Premier Zhu Rongji voiced optimism that an
agreement for China joining the WTO can be reached before the end of this
year.

Despite marathon negotiations over the past four days and a flurry of
last-minute trade concessions from China, the administration decided it
needed more than Chinese negotiators were willing to offer to sell the trade
package to a hostile Congress.

The failure to clinch a final agreement was a significant setback for Zhu,
the first Chinese premier to visit America in 15 years. He had hoped to win
U.S. backing for China's entry into WTO during his meetings with Clinton.

``We made significant progress toward bringing China into the World Trade
Organization on fair commercial terms, but we are not there yet,'' Clinton
told reporters at a joint news conference with Zhu.

Clinton hailed separate deals for eliminating significant Chinese barriers to
American agriculture products, including beef, pork, poultry, citrus and
wheat grown in the Pacific Northwest.

Other signed agreements included doubling the number of passenger and cargo
flights between the two countries. And the administration got a commitment
from China to crack down on piracy of computer programs by Chinese government
agencies.

The two countries also issued a joint statement listing trade concessions
that China offered in hopes of winning America's support for WTO membership
and pledged to continue working toward achieving that goal by November, when
the WTO is scheduled to launch a new round of global trade talks in Seattle.

The joint statement, however, also listed areas still in dispute, most
notably an American demand that China still be subject to unilateral U.S.
trade sanctions for a period of years after it enters the WTO.

The administration was unwilling to relent on this point, fearing charges
from opponents that it had given its enforcement rights for forcing China to
comply with its commitments.

One of the main benefits China would receive from WTO membership would be
protection from new U.S. sanctions without first winning a trade case before
an impartial WTO hearing panel.

Other areas where China's market-opening offers were deemed insufficient were
banking, especially the ability of U.S. firms to offer auto loans to Chinese
consumers, sales of stocks and other securities and distribution rights for
American-made movies.

U.S. Trade Representative Charlene Barshefsky, briefing reporters on the
talks, rejected a suggestion the administration may have given ammunition to
Chinese critics of Zhu, who is viewed as a leading proponent of economic
reforms.

Zhu ``is anxious for very substantial reform of the Chinese economy and to
move it more toward the direction of market economies ... This will help to
solidify China as a place where companies will want to do business,''
Barshefsky said.

China has been trying for 13 years to win entry in the WTO and the
organization that preceded it, the General Agreement on Tariffs and Trade. It
needs approval from the United States and other major trading powers for
membership in the Geneva-based organization that sets the rules for global
trade.

The Clinton administration has been unwilling to drop its objections until it
is satisfied with China's commitment to lower its high tariffs and other
trade barriers that the administration sees as a chief cause for America's
soaring deficit with China. Last year that deficient reached $57 billion, the
largest for any nation other than Japan.

China's last-minute push for a deal in time for Zhu's visit also was coming
at a time of rising U.S.-China tensions in other areas outside of economics,
including allegations that China stole nuclear secrets from American
laboratories.

Under the agriculture agreement announced Thursday, China will lift a
long-standing ban on shipments of wheat from the Pacific Northwest and citrus
from Florida, Texas and California. It also agreed to eliminate burdensome
inspection requirements on American beef, pork and poultry.

Chuck Lambert, chief economist for the National Cattlemen's Association, said
the accord should produce big gains for American meat producers.

Other U.S. industries also supported the concessions U.S. negotiators won,
although many companies who have longed hoped to expand their operations in
China urged the administration to push forward for a final deal without
delay.

``China has shown its willingness to open the door to its enormous market
wider than ever, presenting Americans with unprecedented opportunities to
trade with the world's most populous country,'' said Philip Condit, chairman
of Boeing Co. and head of a trade task force of the Business Roundtable.

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