US-CHINA TRADE WAR MAY BE AVERTED

The United States is hopeful it will settle its trade dispute with China over market access before an Oct. 10 deadline set by Washington, a senior official said yesterday.

"Although there is still a significant gap in the positions of the two sides and much work remains, I remain hopeful we will be able to reach an agreement by the Oct. 10 deadline," Deputy US Trade Representative Michael Moskow told a news conference after meeting senior Chinese officials.

The United States has backed up its demands with a threat to impose the most sweeping trade retaliation in its history by slapping punitive tariffs on up to $3.9 billion worth of Chinese goods. China has said it would take similar action against $4 billion of US products if Washington carried out its threat.

Mr. Moskow played down the possibility of negotiations deteriorating to that stage. "I certainly hope we don't have a trade war over this," he said.

He indicated that China had resolved not to let its anger at President Bush's decision to sell F-16 fighter jets to Taiwan jeopardize the trade talks.

"They may have commented about the fact that this had happened, but it was never a serious or extensive part of discussions," Moskow said.

The dispute over market access is worth billions of dollars each year to both countries.

"We want China to provide full and unimpeded access and opportunity for American farmers, manufacturers, and American exporters to sell in this growing Chinese market," Moskow said.

To get what it wants, the United States is asking China basically to dismantle its four-decade-old communist-style trading system that is filled with obscure and secret rules and regulations, something Beijing says cannot happen overnight.

The US, in addition to using the stick of a damaging trade war to cudgel China into agreement, is holding out the carrot of letting it join the General Agreement on Tariffs and Trade if it yields to Washington's demands.

"Success in these negotiations will indicate to the United States and to the GATT contracting parties that China is willing to make those changes that are necessary to join the international trading system."