U.S., China Resume Talks at Auckland Forum : Summit: Clinton and Jiang hope to reach agreement on WTO entry at APEC meeting, which opens today.

The White House declared Saturday that U.S.-China relations are “back on track” after an hourlong meeting here between President Clinton and Chinese President Jiang Zemin covering an array of controversies that have heightened tensions between Washington and Beijing in recent months.

The two presidents are among numerous world leaders now in Auckland to attend a two-day meeting of the Asia-Pacific Economic Cooperation forum, an annual opportunity for representatives of 21 Pacific Rim economies to discuss trade and financial matters. The meeting opens today.

The clearest evidence of a thawing Sino-U.S. relationship after Clinton and Jiang’s meeting was their go-ahead for the two nations to resume negotiations--perhaps as early as today--over China’s keen desire to join the World Trade Organization, which sets rules governing international commerce.

“The two sides will strive to reach an early agreement,” said Chinese Foreign Ministry spokesman Zhu Bangzao. “This was a very important meeting at an important time in U.S.-China relations.”

In another move that no doubt gratified the Chinese, Clinton implicitly criticized Taiwanese President Lee Teng-hui for suggesting recently that the island should have a “state-to-state” relationship with Beijing.

Clinton told Jiang that Lee’s remark had “made things more difficult” for China and the U.S., according to Samuel R. “Sandy” Berger, the president’s national security advisor.

At the same time, Clinton also defended U.S. arms sales to Taiwan and reiterated America’s long-standing warning, vague though it may be, that use of force by China against Taiwan would lead to “grave consequences.”

“The president was very pleased with this meeting,” Berger told reporters afterward. “It was . . . a very productive, friendly, non-polemical and quite comprehensive meeting between the two leaders.”

The session--the first between Jiang and Clinton since June 1998 in Beijing--appears to have set the stage for a resumption of bilateral discussions on a range of issues that have frayed relations between China and the U.S., from the suppression of human rights in China to U.S. sales of weapons to Taiwan.

In their meeting, Clinton and Jiang each raised many of those issues.

“I would consider the relationship between our countries now back on track--with, of course, many challenges still facing us,” Berger said.

He acknowledged that Washington and Beijing “still have plenty of problems,” but added: “The best way to deal with those issues is to deal with them.”

Berger also noted that there are “large strategic war-and-peace issues” where the interests of both nations “converge,” such as relieving tensions on the Korean peninsula and ensuring stability in South Asia.

“This is a complex relationship between the most powerful country in the world and the largest country in the world, who have fundamentally different systems and serious disagreements. But we need to try to work through those for their common interests,” Berger said.

Time constraints prevented Clinton from bringing up the crisis in East Timor. But Berger said the president fully intended to do so--not only with Jiang but also with the many other world leaders now in Auckland.

Senior aides to both presidents said the dynamics of Saturday’s meeting were a study in contrasts, as Clinton led off with the easiest item on the agenda--the WTO negotiations. Jiang chose to talk first about the most contentious: Taiwan.

But, said Berger, “these are two leaders who, after 6 1/2 years, have learned to deal with each other--through good times and bad.”

Clinton is scheduled to meet today with new Russian Prime Minister Vladimir V. Putin. In addition, the president is to meet jointly with South Korea President Kim Dae Jung and Japanese Prime Minister Keizo Obuchi, largely to discuss security concerns on the Korean peninsula.

After the APEC meeting, Clinton is scheduled to remain in New Zealand for a state visit. He is the first American president to visit this island nation since Lyndon B. Johnson in 1966.

Sino-U.S. tensions have heightened in recent months, particularly after Clinton rejected a tentative agreement hammered out by trade negotiators that would have granted China entry into the WTO.

He rejected the proposal even though Chinese Premier Zhu Rongji had made what many considered significant concessions, such as offering to phase out quotas on U.S. imports and reduce tariffs in several areas by 2005.

In the ensuing months, relations were further strained after an errant NATO airstrike hit the Chinese Embassy in Yugoslavia during the air war over Kosovo, killing three Chinese. Beijing then cut off the WTO talks altogether. The Chinese crackdown on followers of the Falun Gong religious sect also exacerbated relations.

After Saturday’s Jiang-Clinton meeting, Chinese spokesman Zhu said that China could become a WTO member in short order if the U.S. takes a “flexible and constructive” approach in the upcoming talks.

But in a sign that significant differences remain, neither side issued a timetable for concluding the talks.

“There was no timeline set. But I think through the discussions was a serious recognition of the fact that sooner is better than later and that there is a need to move this process forward in a time that makes it viable for China to enter the WTO this year,” said Gene Sperling, Clinton’s national economic advisor.

Both sides would like China to be admitted in time for the ministerial meeting of the WTO in Seattle at the end of November. But that may be an overly ambitious goal.

China’s entry into the WTO must be approved by Congress because legislation is required for China to be granted permanent status as a normal U.S. trading partner.

Some in Congress oppose that status because of China’s human rights record. Others fear a flood of cheap textiles and clothing would result.

Proponents of WTO membership for China say it would benefit many sectors of the U.S. economy and American consumers by removing trade and investment barriers.

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* TRADE STATUS MATTERS: The stakes in the U.S.-China talks are high if not well understood, James Flanigan says. C1