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NEWS ANALYSIS : U.S. Will Back China's Bid to Join WTO : Trade: It also softens stance on 'development' status of nation, meaning rules will be less strict.

March 14, 1995|RONE TEMPEST | TIMES STAFF WRITER

BEIJING — When China uncharacteristically gave in to tough American demands two weeks ago on copyright piracy and other intellectual property issues, the main unanswered question was: What did the Clinton Administration give in return?

The answer came this week in a visit to Beijing by U.S. Trade Representative Mickey Kantor. In a news conference Monday, Kantor said the United States will support China's bid to join the World Trade Organization.

More important to the Chinese, Kantor reversed a previous position by announcing that the U.S. government will consider China's entry into the global organization under less stringent trade rules afforded developing countries. Until recently, the United States had insisted that China meet the same standards as other major industrial powers.

"We need to be flexible," Kantor said, referring to the United States, Europe and Japan. "I think we all agree that for certain purposes, China, of course, is a developed country. For others, it is a developing country."

In background briefings, U.S. trade officials said the practical result of the softened Administration position on China's entry into the WTO is that China will be granted extra time--years, in some cases--before it will be required to phase out certain tariffs and protective trade restrictions.

"China has a wide variety of characteristics," said one American trade official. "There are places along the seaboard that are developing rapidly and look a lot like Taiwan and Korea did a few years ago. There are parts of the interior which are much poorer. But overall, as a trade regime, we are dealing with an enormously important, enormously large, powerful player."

Recognition of the country's hybrid status as a huge but still developing economy is precisely what the Chinese trade negotiators had been seeking when talks broke down for their entry into the WTO in December.

Kantor said the revived WTO talks with China are expected to begin in April in Geneva. "I have agreed to become personally involved with and review all proposals related to China's WTO accession," he said.

The American concession on developing-country status was a particularly satisfying victory for Chinese Foreign Trade Minister Wu Yi, for whom China's entry into the WTO--the successor to the General Agreement on Tariffs and Trade--had been a primary goal.

Wu's reputation as a tough negotiator had suffered in recent encounters with American officials. The recent U.S.-China agreement on intellectual property enforcement, signed by Kantor on Saturday, was widely viewed as a capitulation to American demands that the Chinese government crack down on copyright, patent and trademark infringement.

After the signing ceremony, Wu criticized the Americans and threatened to impose sanctions by failing to renew a trade memorandum between the two countries if the United States continued to block China's entry into the international trading organization.

But on Monday, pleased with the new conciliatory tone set by Kantor, Wu announced that the 1992 bilateral memorandum of understanding, which obliges China to open its markets for imports from the United States, will be honored.

In what is becoming standard for Administration officials, Kantor was accompanied to Beijing by a delegation of American business leaders and industry representatives who applauded enthusiastically from the front rows as he announced the accomplishments of the three-day visit in a news conference.

In the delegation was Robert D'Ornellas, chief executive of agribusiness company Del Monte Foods. Kantor said one of the benefits of a letter of intent signed between the two countries during his visit will be the opening of the Chinese market to apples and cherries from Washington state.

Other industry officials included Jay Berman, president of the Recording Industry Assn. of America; Robert Holleyman of the Business Software Assn., and Safi Qureshey, CEO of AST Research in Irvine, who traveled with Kantor to demonstrate support for the intellectual property agreement.

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