U.S. and Chinese trade negotiators went into overtime for a second time today, agreeing to talk for another day in an effort to reach a deal to bring China into the World Trade Organization. The extension came just hours after U.S. officials threatened to go home unless the Chinese side offered "some reason to stay."
"Although progress has been slow in the talks so far, because of the importance of the issue, both sides thought it would be useful to have an additional day of meetings," said U.S. Trade Representative Charlene Barshefsky, head of the U.S. delegation.
The U.S. Embassy said only that Barshefsky held talks with "senior Chinese leadership" this morning.
Negotiators have been tight with details about what is dividing them in the Beijing talks. But a senior U.S. diplomat said U.S. firms' access to the Chinese telecommunications market and Chinese access to the U.S. textile market remained major issues to resolve.
A senior Clinton administration official in Washington said negotiators were trying to prod Beijing back to an offer it made in April to allow foreign investors to have majority control of certain kinds of telecommunications companies in China. The official said that resumption of talks was a sign that Barshefsky's threat to leave Beijing had persuaded the Chinese to be more flexible.
The U.S. team had come to Beijing planning only to talk on Wednesday and Thursday but extended the discussions to Friday and then Saturday.
Negotiations between China and the United States have been laced with political gamesmanship ever since the two sides established diplomatic relations in 1979. The Chinese side sometimes calls negotiators back from the airport to keep talking.
On Friday morning, Barshefsky and the rest of the U.S. delegation, which includes White House economic adviser Gene Sperling, were left to drive around Beijing for hours after Chinese officials delayed their scheduled meeting several times.
China has been trying for 13 years to join the WTO and a predecessor agency that regulated international commerce. In what many administration officials now see as a crucial foreign policy misstep, President Clinton in April rejected a bold market-opening proposal offered by Chinese Premier Zhu Rongji to win formal U.S. support for Chinese membership. That decision gave Zhu's protectionist critics at home time to organize against the deal.
NATO's May 7 bombing of China's embassy in Belgrade during the Kosovo war sent relations into a downward spiral and resulted in suspension of the talks. Serious discussions began again only Wednesday, after repeated prodding from U.S. officials, including Clinton.
Chinese leaders view WTO membership as a tool to attract foreign investment, boost China's fledgling economic reforms and protect the country from unilateral sanctions by trading partners. Beijing wants to join before ministers from WTO member nations gather in Seattle on Nov. 30 to plan a new round of trade liberalization talks.
For its part, the United States is eager to see China come officially under the rules of international trade. It also wants better access to China's still highly protected market of 1.3 billion people--this is what China would have to grant to win U.S. support for its entry into the organization.
The Chinese offer in April would have given U.S. firms wide access to industries long protected from foreign competition, including telecommunications, distribution networks, and markets for agricultural commodities such as wheat and pork. But efforts to revive that offer have become mired in politics in both capitals.
Washington's publicly stated position has been that China must reduce trade barriers below what Zhu offered in April. China, meanwhile, has said it will back away from elements of the market-opening concessions that U.S. officials thought they secured in April.
Fred Hu, a China analyst at investment bank Goldman Sachs & Co. in Hong Kong, calls these two negotiating positions "April-plus" and "April-minus."
"At this point, it really is a political decision. Either April-plus or April-minus is broadly acceptable" in the context of the WTO's requirements, he said, adding that a number of current members were admitted under less-stringent terms. "The differences aren't that huge. It's a simple political decision," he argued.
Hu said the Chinese "at least in public, want to have April-minus." But conversations with Chinese officials have convinced him that China would be willing to go back to what it offered in April. "I think that's a very good basis for a deal," he said
Andy Xie, a China economist at Morgan Stanley in Hong Kong, said he believes senior Chinese leaders, including President Jiang Zemin and Zhu, are eager to reach a WTO accord with the United States. Doing so would jump-start stalled efforts to reform China's ailing state-owned enterprises by boosting competition, Xie said. Jiang has organized a meeting of top political and economic officials to offer them a chance to voice their complaints, he added.
"There's nothing the negotiators can do. They are waiting for these people to talk," Xie said. "Jiang Zemin wants to do it [join the WTO], but he doesn't want to antagonize too many people."
The key opponents of reaching a deal are the Ministry of Information Industry, which maintains China's telecommunications monopoly; agricultural interests; big state-owned enterprises; and some of the country's poorer, inland provinces, which all stand to suffer from trade liberalization, at least in the short run, Xie said.
Washington Post staff writers John F. Harris and John Burgess contributed to this report from Washington.
CAPTION: A police officer guides U.S. Trade Representative Charlene Barshefsky's vehicle in Beijing yesterday.