US and China Tackle Difficult Trade Issues

THE United States and China this week are engaged in what diplomats and trade officials predicted would be especially combative talks over China's ballooning surplus in bilateral trade.The closed negotiations in Washington were expected to have a bellicose tone because of recently released figures showing that, in June alone, China's trade surplus with the US exceeded $1 billion. The figure puts China's trade surplus second only to that of Japan. American trade officials estimate that the US short-fall in trade with China could swell from $10.4 billion last year to $13 billion in 1991. The US officials have given increasingly blunt warnings this year as China has failed to dismantle barriers to US imports and ensure sufficient copyright protection for foreign products. The stakes in the four-day talks are high for China, the diplomats and trade officials say. If Beijing resists US proposals, it will complicate its effort to persuade the US Congress not to revoke preferential tariff treatment worth billions of dollars in trade, they say.

Favored trade status Many members of Congress have pointed to the imbalance in Sino-US trade, as well as Beijing's abuse of human rights, when opposing most-favored-nation trade status for China. Nevertheless, Chinese officials say that Washington should not expect a quick resolution to the trade dispute. "Haste makes waste," said Sun Zhenyu, from the Ministry of Foreign Economic Relations and Trade (MOFERT), before leading the 16-member delegation to Washington. "We cannot solve all the problems [in Sino-US trade] overnight," Mr. Sun said. Still, US officials claim that Beijing in recent years has thwarted overseas exporters and could just as rapidly open the door to US goods. Since 1988, China has erected more than 40 barriers to imports in addition to the many previously in place, the officials say. Most conspicuously, China has severely curtailed import licenses. The measure is part of its urgent effort to reduce debt, amass foreign reserves, and cope with the international isolation following the crackdown on pro-democracy protests in 1989. US trade officials say that during the negotiations they will encourage China to safeguard patent and copyright protections for US products ranging from chemicals to entertainment videos to computer products.

Software rip-offs Computer software companies in the US estimate that they annually suffer $400 million in lost sales because of inadequate copyright protections in China. Washington also hopes in the talks to persuade China to tear down impediments to 148 categories of imports, US trade officials say.