Commerce Secretary Juanita Kreps said today that she expects to initial a general trade agreement with China on Monday, barring last-minute snags.
The accord, if approved by Congress, would grant most-favored-nation status to Chinese exports to United States, increasing trade and easing many other kinds of business contacts between the two countries.
The Chinese also appear to regard the agreement as an important political and psychological symbol of improved ties with Washington, to counter the threat from their arch foe, the Soviet Union.
Kreps had said earlier that negotiations were slowed by Peking's unfamiliarity with the details of American patent law and tariff law, which are reflected in the draft agreement submitted by Washington. She ended a six-day visit to Peking without an agreement, but left a team of negotiators behind to continue to work out necessary compromises.
Strong support for the agreement from Deputy Premier Deng Xiaoping apparently has removed some obstacles.
Kreps told reporters today while traveling by airplane from the resort town of Guilin to this southern port city: "I now think that it is quite likely that we will be initialing an agreement tomorrow."
She added" "I would like to stress that in these negotiations like all others there is a chance of slippage."
Analysts estimate approval of most-favored-nation status would increase Chinese exports to the United States by at least 20 percent within two years, and help bring more business to U.S. salesmen in China. Commerce Department analysts say they expect total Sino-American trade to double from about $1.1 billion in 1978 to about$2 billion this year.
Other analysts predict, however, that current readjustments in the pace of China's major foreign purchases might slow this growth. They also express some doubt about predictions that trade with China will increase to $5 billion by 1985.
One U.S. official said earlier today that negotiators had apparently reached general agreement on the main issues in the pact, but that were still disagreements over language.
Kreps and the officials traveling with her have taken note of the misunderstanding that developed between the Chinese and American sides after Treasury Secretary Michael Blumenthal initiated an agreement in Peking on March 1 settling old U.S. claims in China and releasing frozen Chinese assets in the United States. Chinese negotiators thought they had an implied understanding that the U.S. government would actively help return the assets to Peking. Nothing was in writing, however, and the American balked, citing U.S. banking laws that forbade them to force banks to disclose the name of their depositers.
Peking refused to sign a final agreement because of the misunderstanding until a compromise was reached the last of the Peking part of Kreps' China visit.
The trade agreement will set out rules for protection of patents and copyrights, facilitation of business negotiations, conciliation of disagreements and the extension of most-favored-nation status.
Negotiators say the Chinese sought a very general agreement, like those they have signed with Japan and the European Economic Community. The Americans have insisted on very specific language to cover every eventuality. The Chinese prefer to rely on ad hoc bargaining when disagreements arise.
Washington now extends most favored-nation status to all but five nation with which it trades - China, the Soviet Union, Bulgaria, Czechoslovakia and East Germany - officials said. U.S. officials expect Congress will consider bills to waive the provisions of the 1974 Jackson-vanik amendment so that most-favored-nation statues can be extended to both China and the Soviet Union. Jackson-Vanik prohibits trade benefits to nations that restrict emigration, but both peking and Moscow have loosened restrictions recently.