China Signals Willingness to Continue Trade Talks

WASHINGTON — Despite widespread rage over the errant bombing of its embassy in Belgrade, China has begun to signal that it may be willing to resume talks on a sweeping trade deal with the United States.

U.S. Embassy officials in Beijing have quietly relayed word to Washington that some Chinese officials were saying they expected a continuation of the talks between Robert Cassidy, a U.S. trade negotiator, and Long Yongtu, his Chinese counterpart, perhaps as early as next week, as originally scheduled.

“We’ve had some informal communications with the Chinese government in the last 24 hours, and at this point it’s just as likely as not that we may actually reconvene the talks next week,” an optimistic U.S. trade official said Tuesday, speaking on the condition of anonymity.

Resumption of the talks in the extremely chilly climate after the bombing would underscore the acute importance China places on joining the World Trade Organization and on forging broader economic ties with the outside world.

Administration officials are resigned to the prospect that the military debacle will not only draw out the negotiating process, but also embolden opponents of a deal in Congress, which must approve any accord.

But White House officials who have focused exclusively on the economic relationship between the two nations continue to hold out hope that Chinese advocates of trade liberalization will prevail, even as ordinary Chinese express outrage at the bombing, which killed three people and wounded more than 20.

“I think it’s interesting and noteworthy that while China has indicated it intends to suspend military and other forms of cooperation, trade is conspicuously absent from that list,” U.S. Trade Representative Charlene Barshefsky said.

In the bombing’s aftermath, China is boycotting talks on human rights, arms proliferation and international security, as well as high-level military contacts with the United States.

“My hope is that the Chinese will continue to feel that constructive activity can still go forward, even in the face of the accidental bombing,” Barshefsky said.

The Chinese signals on resuming the trade talks were delivered indirectly, through comments made by Chinese officials to U.S. executives in China, who passed them on to U.S. officials, according to an administration source.

Commerce Secretary William Daley, seeking to play down the bombing’s collateral damage to the trade talks, maintained that “enough progress has been made” that a broader deal remained in reach. But he acknowledged that the military accident would slow the talks.

Because China is such an incendiary issue on Capitol Hill, President Clinton had hoped to wrap approval of the WTO trade agreement in with the separate, annual battle over granting China normal trade treatment. But the bombing raises the prospect of two acrimonious disputes over China in the near future, first over normal trade status and later over the broader trade deal.

Clinton must make his annual recommendation on whether China should get normal trade status by June 3, and Congress then has 90 days to overturn it. Lawmakers are all but certain to turn that debate into an emotional referendum on U.S.-China ties.

Meanwhile, advocates of the broad WTO deal, a separate issue, are fearful that the later it slides toward year’s end, the more likely it is to become ensnared in political issues in 2000.

“It simply would be a cleaner, more direct strategy to have one vote instead of two,” one official said.

While many considered it a failure that U.S. and Chinese officials did not complete a deal when Chinese Prime Minister Zhu Rongji visited Washington last month, the White House hailed “significant progress” toward a trade deal. In particular, U.S. officials said China had made big concessions in several areas, including agriculture, information technology and industrial products.

Yet even before the bombing, certain developments raised questions about the fate of the negotiations. China took an unexpectedly hard line in related trade talks with Europe, and its senior trade official, Shi Guangsheng, cast doubt on whether Beijing stood behind all of the concessions announced by the Clinton administration.

Some U.S. officials are hoping those developments are merely a ploy to wring more concessions from the United States, although few rule out that they could suggest a backlash that could doom the talks.

“This is not a political deal, it’s a commercial deal,” Daley said, alluding to the multitude of business interests that would be affected by the rules of an agreement, “ . . . and that’s what makes it more difficult.”