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Sunday, September 12, 1999 Published at 20:52 GMT 21:52 UK

Business: The Economy

US-China trade talks resume

Up to now the East Timor question dominated the Apec summit

China and the United States formally resumed negotiations which could lead to Chinese membership of the World Trade Organisation (WTO) in Auckland on Sunday, as US trade negotiator Charlene Barshefsky meet Chinese trade minister Shi Guangsheng.

Some American officials suggested that agreement could be reached in days.

[ image:  ]
The development follows a high-level meeting between US President Bill Clinton and Chinese President Jiang Zemin, which eased tensions between the two countries. Trade talks were suspended by the China on 7 May following the accidental bombing of the Chinese embassy in Belgrade as part of Nato's Kosovo campaign.

Meanwhile, leaders of 21 Pacific Rim economies began their annual summit by urging an ambitious agenda at the next round of world trade negotiations, due to begin in Seattle in November.

The BBC's Jill McGivering in Auckland: President Clinton said Asian economies were well on the road to recovery"
The two-day meeting of the Asia-Pacific Economic Co-operation Forum (Apec) brings together countries such as the United States, China, Japan and Russia.

The summit's official commique is expected to stress the need to continue economic reforms, especially in the financial sector, following the more optimistic climate now that the Asian financial crisis is easing. Apec trade ministers hope to reduce or eliminate tariffs in eight business sectors.

They have also challenged the European Union to end subsidies for agricultural exports.

Now that the Indonesian government has agreed to allow UN peacekeepers into East Timor, the summit will be able to resume its focus on economic issues.

Trade talks back on the agenda

China's membership in the WTO, which is backed by most Apec members, is one of the most important issues on the world trade agenda.

[ image: China's Jiang Zemin receives a Maori welcome]
China's Jiang Zemin receives a Maori welcome
It is the largest trading nation outside the global trade rules laid down by the WTO.

But the United States has been demanding tough conditions, including the opening of China's major industries to foreign competition.

A planned deal in April fell through after fears that the US Congress would not approve it.

US businesses are pressing for a successful conclusion this time.

"A comprehensive WTO agreement .. would set the foundations for China's integration in the global trading system, open the world's largest emerging market to new and unprecedented opportunities for American companies, farmers, and workers, and spur China's ongoing economic reform programme," said the US Pacific Basin Economic Council, a group representing USmultinational companies.

China is now making it clear that there are limits to how far it can go.

"China will never accept terms that exceed the economic capacity of the country," said a Chinese spokesman.

If a deal on Chinese membership in the WTO is not reached soon, it will probably have to postponed until after the trade talks, which will last for at least three years.

Clinton urges reforms

At a meeting of business leaders before the summit officially opened, US President Bill Clinton pointed out the progress that had been made since last year in stabilising ailing Asian economies.

He called on Asian countries to press ahead with economic reform programmes, and not to be complacent about their recovery.

He also called on governments to be more open about the way they award state contracts, and urged the relaxation of trade barriers, as well as the need to protect the environment.

But the pain of the Asian financial crisis has made the countries of the region more cautious about the fast pace of economic liberalisation advocated by Washington.

Apec leaders are also likely to resist a call from Canada's premier Jean Chretian to broaden its discussion of trade issues to include labour and environmental issues.

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