Lead American trade negotiators expressed dismay today at the lack of progress in last-ditch talks with China over its entry into the World Trade Organization.
U.S. Trade Representative Charlene Barshefsky and her team had planned to leave this morning for Washington but stayed on for an extra round of talks. However, the Chinese postponed today's 9 a.m. session for fours hours, apparently because of a leadership split over the WTO issue within the top ranks of the Communist Party. The talks resumed this afternoon.
"We came hoping to make progress. We're discouraged that progress has not been made at this point," Barshefsky said today. "The clock has nearly run out."
China has been trying to get into the WTO for 13 years. The talks this week are seen as China's last, best chance to gain entry into the 134-member club. But the clock is ticking. If senior officials from the WTO's 134 members agree to launch new global trade liberalization talks at a Seattle meeting on Nov. 30, new trade rules would stiffen requirements for China's entry.
Sources close to the Chinese government said that this morning's meeting was put off because the Politburo of the Communist Party was seriously divided on substantive issues regarding China's entry into the world trade body. One source said there was an "enormous" debate on the subject.
The source added that the Politburo's indecision on the matter was indicative of a broader problem within China's leadership. "We don't know exactly what we want right now," the source said. "There are many different factions and each is fighting for its interest."
Entry into the WTO could have a major effect on China's economy, a possibility that has alarmed some factions within China's government. Specifically, it would break the monopoly that certain ministries have on segments of the Chinese economy, such as telecommunications, and it could hurt China's farmers because it would allow for the import of potentially large quantities of American agricultural products.
Furthermore, WTO entry could further the privatization of China's economy, a disturbing prospect for more conservative factions within the Chinese government.
Both Chinese and U.S. officials have been tight-lipped during this round of talks, but Chinese Foreign Trade Minister Shi Guangsheng said he expected "advances" during the current talks, the official China Daily reported Thursday. Foreign Ministry spokeswoman Zhang Qiyue told reporters that China expected to enter the WTO as a "developing country" and "should not take obligations unsuitable for such a status."
"WTO accession is needed to further push forward China's reforms and opening up," she said.
China and the United States are trying to rebuild their trade ties after six months of rocky relations. On April 7, Prime Minister Zhu Rongji proposed a series of market-opening measures in the United States that President Clinton rejected.
Clinton's action was bad news for U.S.-China trade relations and bad news for Zhu, who, sources said, offered to resign upon his return to Beijing.
Then, on May 7, U.S. forces bombed China's embassy in Yugoslavia, halting all trade talks. Some negotiations resumed in September, but they did not become substantive until Wednesday.
U.S. analysts say the negotiations are focused on several topics--such as telecommunications investment and anti-dumping provisions. More broadly, however, China appears to be fighting to yield less than it would have under its April 7 proposal.
The U.S. side wants to be able to present Clinton with a better deal.