Zhu Rongji

The man of the one hour that changed the course of make-or-break trade talks

PUBLISHED : Monday, 12 December, 2011, 12:00am
UPDATED : Monday, 12 December, 2011, 12:00am


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Former vice-minister of commerce Wei Jianguo has seen just how much a leader's personality and wisdom can change history.

As a witness to Sino-US talks around China's bid to join the World Trade Organisation, Wei saw former premier Zhu Rongji play a decisive role at a critical moment.

'Premier Zhu's involvement at the 11th hour, in the last and most crucial round of talks between China and the US 12 years ago, was crucial for China's official admission to WTO a year later,' Wei said, referring to the negotiations that resulted in an agreement between the two Pacific trade partners on November 15, 1999.

A deal with the US was the most critical one at the time, as it would pave the way for agreements with Europe and other countries. Since April that year, US president Bill Clinton had turned down a WTO pact with China, and administration officials questioned whether an agreement could be reached at all, let alone in time for the WTO summit in Seattle on November 30.

In historian Taylor Branch's The Clinton Tapes, Clinton is reported as saying that his administration was divided over whether to support China's full membership of the WTO. But Zhu also confided in Clinton, in private, about arguments within his government in Beijing about whether to trust foreigners on trade.

To show the Chinese he was serious, Clinton took the unusual step of first sending trusted White House aide Gene Sperling, along with US trade representative Charlene Barshefsky, to Beijing. And days before the crucial talks, Clinton phoned president Jiang Zemin twice to lay the groundwork.

Barshefsky and her team planned to stay in Beijing for two days, from November 10 to November 11. But the talks were extended four times, ending at 3am on November 15.

They had another brief meeting that day to end the talks. 'They had packed their bags in their vehicles before the morning meeting, preparing to leave empty-handed,' Wei said. Then, during the meeting, Wei had a call from Zhu's personal secretary, telling him the premier was on the way.

'I couldn't believe my ears, as Zhu was then chairing the most important economic meeting of the year, the Central Economic Work Conference,' Wei said.

According to a book of Zhu Rongji's speeches, Zhu skipped the conference while Jiang was delivering a speech. Zhu started the bilateral meeting by asking if Clinton's envoys were using the old tactic of walking away from the negotiating table.

'China's top leadership already met yesterday and agreed to certain concessions, so I can offer no further concession this time,' Zhu told Barshefsky and Sperling. 'If we lose this historic opportunity to make a deal, there will not be another chance.

'You want [American companies] to have controlling stakes in cinemas, but it is not easy for us to agree to a joint venture - everybody knows how sensitive it is when it comes to ideology. Let's discuss the controlling-stake issues in the future - we haven't closed the door.

'There will be no [foreign] controlling stake in audiovisual joint ventures,' Zhu added, insisting on no further concessions from a package tabled on April 10.

The Chinese transcript cites Barshefsky as then saying: 'This is very difficult, probably equally difficult politically, expiring the non-market-economy status in regard to anti-dumping.

'We told the president about your proposal for it to expire in 12 years, and he suggested 15 years. If you find it acceptable, we could stick to the April 10 text on audiovisual sector.'

'Yes,' Zhu said.

'Then a deal can be done,' Barshefsky said.

'China won't rescind on what it has agreed,' Zhu said. 'One more thing, about giving up [state enterprises'] exclusive distribution rights in chemical fertilisers, you didn't raise it in the April package, so is the US no longer insisting on that this time?'

'That is a big problem,' Barshefsky said. 'I understand that is not an additional request.'

But in the frantic hours that followed, US and Chinese negotiators hammered out a landmark agreement that would pave the way for Beijing to join the global trade family.

Wei said Zhu's meeting with US negotiators lasted an hour.

'Premier Zhu's personal intervention changed it all, pulling it back from the brink of failure,' Wei said. 'We can see today the meaning of that moment and its impact on China's modern history of development, reform and openness.'

Wei said that if it were not for Zhu, China's admission might have been delayed for years or never happened. Zhu and the Chinese negotiators led by then foreign trade minister Shi Guangsheng, had been scorned by many protectionist ministries and giant state-owned enterprises.

Additional reporting by Sally Wang and Matt Ho