A high-profile meeting between the Chinese premier and U.S. trade negotiators pushed talks on China's membership in the World Trade Organization into the early morning hours, with an agreement closer than at any time in 13 years.
In the meeting, inside China's red-walled Zhongnanhai leadership compound Saturday, U.S. Trade Representative Charlene Barshefsky asked Premier Zhu Rongji to provide a clear indication that China was prepared to reach an accord after the series of largely fruitless talks that began Wednesday, sources with the U.S. trade mission said. Zhu, an economic reformer known for his straight-shooting style, broke the impasse on the spot and sent the Americans away to meet with his subordinates to hammer out an agreement, the sources said.
Teams of specialists still were meeting at the Ministry of Foreign Trade early Sunday to pore over thousands of specific market-opening measures that would be part of a final accord. Barshefsky and China's Minister of Foreign Trade, Shi Guangsheng, were standing by to deal with remaining issues, the sources said.
If a deal is reached, it could fundamentally alter economic relations between the world's most populous nation and its most powerful one, proponents said. An agreement would mean that China would be forced to open its shores to American products and companies on a scale unprecedented in 50 years of communist rule. As the number of middle-class consumers among China's 1.3 billion people grows in the coming decades, the benefits to U.S. corporations could be enormous, proponents predicted.
Moreover, China's entry into the WTO would be one of the most significant steps in the nation's 20-year campaign of economic reform, proponents said. Once implemented, the market-opening measures and legal changes required to become a WTO member could energize China's stalled efforts to transform state-owned industries and cement China on a path toward a market system and the rule of law, proponents said.
"This is big. . . . China doesn't have good rules. For the first time, it would be following international rules," said Andy Xie, a China analyst with Morgan Stanley, Dean Witter, Discover & Co. in Hong Kong. "Eventually, the rule of law will take hold in China. In 10 or 20 years, they will consider this one the key moment. Without joining the WTO, the whole thing wouldn't have moved forward."
Xie warned that failure to reach a deal would mark a major defeat for Chinese reform. Debate at the highest levels of the Chinese government has been intense, but "if they can't compromise, this is going to signal something bad about China's political process."
It remained unclear how the market-opening proposals currently in play may differ from those offered by Zhu during a trip to Washington in April. Both sides had hoped to get a bit more out of the deal than they did in April, in part because of the need to play to their domestic constituencies. The April proposal slashed market barriers in sectors ranging from telecommunications and automobiles to agriculture and entertainment. After Clinton rebuffed it, the long and winding WTO negotiations nearly collapsed.
An agreement would be a welcome development for two presidents on opposite sides of the Pacific who are each concerned about their legacies. President Clinton and his Chinese counterpart, Jiang Zemin, each could reap long-term gains if they can shepherd a deal through their rough domestic waters. A deal also could be cast as a piece of good news in a China-U.S. relationship that has been beset by serious problems over the past year.
CAPTION: U.S. Trade Representative Charlene Barshefsky prepares to attend another round of WTO meetings in Beijing.