Trade sanctions deadline looms over talks

PUBLISHED : Saturday, 15 June, 1996, 12:00am
UPDATED : Saturday, 15 June, 1996, 12:00am

Marathon talks are scheduled to continue for a third day in Beijing as United States and Chinese negotiators attempt to avert a multi-billion dollar trade war over property rights.

Acting US Trade Representative Charlene Barshefsky arrived in Beijing last night for last-chance talks with China's trade minister, Wu Yi , prior to Monday's expiry of an American deadline on sanctions against mainland exporters.

Ms Barshefsky's arrival followed two days of closed-door consultations between a US trade team and Ministry of Foreign Trade and Economic Co-operation officials.

Negotiators in Beijing remained tight-lipped on whether the talks, to date, appeared likely to avert sanctions over copyright piracy.

Assistant US Trade Representative Lee Sands refused comment on the negotiations.

Ms Barshefsky is expected to issue a public statement by tomorrow on whether Washington will proceed with sanctions.

US executives in China privately expressed fears that brinkmanship had soured Pacific trade relations, even if an anti-piracy pact is reaffirmed before Monday's deadline.

'All this stop-and-start is not good for business,' said one executive in Beijing, who asked not to be identified.

'We all agree China has to live up to its contracts, but how do you persuade people to buy American if they don't know whether there's going to be an embargo or not?' The US has demanded the immediate closure of Chinese pirate CD plants under threat of 'prohibitive tariffs' against $2 billion in mainland textile and garment exports.

China has vowed to retaliate with comparable sanctions against American farm products, car parts and other goods, while the Communist Party's official People's Daily has accused the US of scheming to 'squeeze into the Chinese market, spread American culture and seek economic benefits' under the pretext of protecting copyright law.

'We're in China trying to develop markets,' lamented a US business representative. 'Whether there's a trade war or not, I have a feeling trade relations are going to remain very political.' American industry estimates it lost more than $2.3 billion last year due to Chinese piracy of compact discs, computer software and audio-visual products, despite the February 1995 signing of a US-Sino copyright pact.

The US Trade Representative, in an April 30 report, cited China as a leading violator of intellectual property rights.

Pirated products accounted for 88 per cent of China's total production of 40 million compact discs last year, according to the International Federation of the Phonographic Industry.

Authorities in Guangdong province announced the closure of at least six CD pirates in the past two weeks, after initially dismissing US complaints of rampant piracy as 'groundless charges'.