The U.S. and China Can't Agree on Trade -- or Much Else

U.S. trade representative Charlene Barshefsky wants about as badly as anyone to get China admitted to the World Trade Organization, but she left Beijing on Tuesday without a deal. Although meetings will continue with lower-level assistants, it will be very difficult to pull it off in time for Chinese premier Zhu Rongji's arrival in the United States next week. So far, the controversial Clinton policy of engaging the Chinese economically and politically has produced little. Chinese human rights abuses continue, U.S suspicions are inflamed over allegations of Chinese nuclear spying and campaign contributions to Democratic coffers, and China keeps opposing key U.S. policy objectives in places like Kosovo. The critics are ready to pounce and "the pressure is on the administration to go slow on deals with China and not give anything away," says TIME U.N. correspondent William Dowell. "For its part, Beijing is hanging tough and not making things easy."

The details of the negotiations involve China's lowering of barriers to various imported agricultural and industrial goods. The main problem, says Dowell, is that "China wants to be treated as a third-world economy, which would allow it to maintain certain protective controls over its market and industries to let them develop. But China is neither underdeveloped nor developed. Besides, its sheer market mass makes it economically problematic for others to grant it trade advantages." The U.S. wants China to come into the WTO unencumbered by special protections. "If not," says Dowell, "U.S officials fear consistency of policy will be lost and the WTO could be wrecked." On the other hand, he adds, "keeping China out of the WTO would cripple the credibility and effectiveness of the organization."