U.S.-China Trade Summit Ends in Compromise

President Clinton’s summit with Chinese Premier Zhu Rongji nearly ended in disaster Saturday after Zhu publicly disavowed a joint statement the White House had issued two days earlier, as well as a far-reaching series of proposed agreements for U.S. access to China’s vast markets.

Intense negotiations to resolve the unexpected dispute lasted all night Friday and finally produced a compromise--including a far less ambitious new joint statement--shortly before Zhu boarded a flight to Denver on Saturday morning.

After the overnight talks, U.S. Trade Representative Charlene Barshefsky and China’s trade minister, Shi Guangsheng, finally signed three agreements for China to lift long-standing prohibitions on the import of U.S. meat, poultry, wheat and citrus fruits.

The accords, which the White House already had announced as completed, were meaningless until China signed them. Agriculture in California and the Pacific Northwest are expected to be the major beneficiaries of the pacts.

Zhu’s departure from Washington ended a problem-plagued 60-hour trip to the capital that may only have further soured U.S.-Chinese relations, which already are tense over questions of human rights, alleged spying, regional security and other sensitive issues.

Before leaving, Zhu also appeared to back away from what seemed an unqualified pledge during a news conference with Clinton to “cooperate” with U.S. investigators probing allegations of Chinese espionage involving U.S. nuclear weapons secrets and of illicit contributions to the 1996 presidential campaign.

Asked about the offer in a televised interview Friday night on PBS, Zhu responded by asking if the U.S. “also would be willing to let Chinese investigators come and question people in the United States.”

He added: “If they said yes to us, I would say yes to them. If they said no to us, I would say no to them.”

Asked later for clarification, Zhu Bangzao, a spokesman for China’s Foreign Ministry, said Beijing “should have reciprocity. We should not just believe the rumors of people chasing shadows.”

Although U.S. officials realized something was amiss during the trade talks Friday afternoon, their worries escalated when Zhu twice told a farewell dinner late that night in a Washington hotel ballroom that he had just endured a “horrible day.”

Zhu then accused the White House of wrongly announcing China’s agreement to “numerous documents” even though marathon negotiations had failed to produce a deal for China’s accession to the World Trade Organization. Insisting that China had made “many, many concessions,” he warned that a future deal on WTO admission could be doomed if the United States pushes too hard.

“Obviously, the premier’s remarks were of great concern to the administration,” said Jay Ziegler, spokesman for Barshefsky. “We definitely had some last-minute bumps in the road.”

It wasn’t immediately clear if Zhu’s complaints resulted from an honest misunderstanding or from bare-knuckle bargaining tactics by either or both of the two camps. But several U.S. analysts said it appeared that the Clinton administration had overreached in trying to put a positive spin on the summit that had failed to reach its chief goal, the WTO deal.

“There’s an element of Keystone Kops here,” said James Lilly, U.S. ambassador to China during the Bush administration. “But there’s always a last-minute back and forth.”

A senior Clinton administration official closely involved in Zhu’s trip put it more delicately.

“There was a little wobbliness at the end,” the official said. “Now, everything is fine.”

Along with the agriculture accords, the White House released a joint statement in the names of Zhu and Clinton that was considerably shorter than the version it put out Thursday. Among the key changes: The new, one-paragraph statement says the United States “strongly supports” China’s accession to the WTO in 1999. The previous statement called that a “common goal.”

Most important, the new statement no longer claims that “agreement has been reached” on a series of lengthy annexes to trade accords, covering items ranging from telecommunications to banking, as part of China’s WTO application. Instead, all references to the specifics of what was discussed, and to what remains on the table, were removed.

Ziegler, the U.S. trade spokesman, insisted Saturday that the proposed market access and protocol agreements with China, which fill 17 pages and were distributed at the White House on Thursday, “have all been memorialized and locked in.”

But several outside experts noted that the annexes aren’t legally binding and won’t take effect unless and until a WTO deal is finally approved and signed.

“None of this is locked in,” said Nicholas Lardy, a China specialist at the Brookings Institution think tank in Washington. “What’s in it for the Chinese to agree to give up anything at the outset? There’s no deal unless there’s a complete deal.”

Robert Kapp, president of the U.S.-China Business Council, said he and many U.S. business leaders were disappointed that a WTO pact was not completed during Zhu’s visit.

“This was a successful negotiation that somehow was not consummated,” he said.

Zhu began his U.S. trip Tuesday in Los Angeles. In Denver, his third stop, he was scheduled to visit a high-tech company, watch a workout by the cheerleaders for the Denver Broncos football team, meet business leaders and attend a dinner hosted by Gov. Bill Owens. He leaves today for Chicago.