WASHINGTON and Beijing are staring each other down in a
high-stakes, year-end battle over trade.
Last week, the United States toughened its line on demands for
better patent and copyright protection in China. US negotiators
broke off talks with Beijing and threatened to impose sanctions
after Dec. 30 if China did not improve its enforcement of laws on
intellectual property rights.
Growing US frustration over rampant copyright piracy parallels
China's own impatience with US objections to the Chinese bid to
rejoin the world trade mainstream by early 1995.
Earlier this month, China threatened to close its market to the
West if the US continued to block its bid for reentry into the
General Agreement on Tariffs and Trade (GATT) and to become a
founding member of the new World Trade Organization (WTO) to be set
up in January. China, which has been waging an aggressive campaign
to rejoin GATT, has not been a member since the Communist victory
But, unlike earlier this year when China used threats of cutting
off access to its booming economy to turn American government
policy its way, the US is not budging. In May, President Clinton
reversed US policy linking low-tariff trade privileges with
improvements in human rights but has so far withstood Chinese
demands for quick action on GATT.
Nor does China appear ready to clamp down on rampant piracy of
films, videos, compact discs, and computer software to satisfy US
demands. At the end of the month, the US could either extend the
Dec. 30 deadline by three months if the sides are close to a
resolution or im-pose sanctions on $800 million of Chinese goods,
the estimate placed on piracy losses by US companies yearly.
Washington began an investigation into intellectual property-rights
infringement in June.
But a compromise appears unattainable before the deadline, since
US officials contend that piracy has worsened during the
18-month-long negotiations on intellectual property rights. "The
Chinese did not make serious offers," said a senior US negotiator
in Hong Kong on Friday, announcing a suspension of talks.
"The day when the US produces its list for retaliation will be
the day when China produces hers," Chinese trade minister Wu Yi
was quoted as saying in People's Daily, the official party
The low ebb in commercial relations between Beijing and
Washington contrast sharply with the mood this summer after Clinton
renewed China's preferential trade privileges known as
most-favored-nation (MFN) status. In August, Commerce Secretary
Ron Brown led a corps of US business executives to China,
trumpeting warming economic ties between the frequent adversaries
and securing Chinese pledges of lucrative business deals.
But US insistence that China open its markets and honor
international trade principles of publishing quotas and other trade
restrictions, ending discrimination favoring Chinese companies and
protecting foreign intellectual property, has soured Beijing. …