CHINA'S re-entry into the General Agreement on Tariffs and Trade could be delayed by one or two years because it is not a high priority with the Clinton administration, a senior executive with a leading US securities firm says. Mr Michael Andrews, a director with Salomon Brothers in Washington, yesterday said President Bill Clinton's immediate priority was the implementation of his economic package to stimulate the domestic economy. He believed the North American Free Trade Agreement, which would make the US, Canada and Mexico a single trading bloc, was also a more pressing issue than China's GATT status. ''I think the Clinton administration wants to get GATT completed but not with the same of priority that Clinton sees NAFTA,'' Mr Andrews said during a five-day visit to Hongkong. ''I think it could be a year or two years off. My sense is it's not as important as NAFTA and it shows they [the Clinton administration] have a regional bias.'' He said China could expect much less resistance in its bid to have the US renew its most-favoured-nation (MFN) trading status without attached conditions. Mr Andrews said many US politicians had shifted their position on China's MFN status by proposing issues such as China's human rights record be dealt with separately. ''It's a small potatoes issue in the overall US scheme,'' he said, adding Congress would probably vote on China's MFN status by mid-October. Mr Andrews said economic realities may be playing a large role in this policy turnaround as US politicians could not ignore China's rapid economic growth. There was little doubt the Clinton administration would take a tougher approach on trade issues but be flexible with countries willing to negotiate within the scope Mr Clinton wanted to achieve, Mr Andrews said. ''One of the interesting things about Mr Clinton is if you agree the trade regiment has to be changed, you can negotiate within that,'' he said. ''But if you take him head one, you'll be in trouble and find it very hard to negotiate.'' Another issue rearing its head in the US is growing sentiment China has not fulfilled its part of the 301 trade agreement signed last year. This view has been exacerbated by China's higher trade surplus with the US. While China's trade imbalance with the US has received a lot of attention, Mr Andrews said there would also be a major showdown with Japan as the US lobbied to gain greater access to the Japanese market. He said trade negotiations with Japan would move away from structural impediments to sector by sector discussions to accelerate the process. Not surprisingly, he said the Clinton administration was also adopting a managed trade approach as senior officials such as Laura Tyson win over President Clinton, who is a free-trade proponent. ''That's why I think this will be a very contentious time period between the United States and Japan and possibly the United States and China,'' Mr Andrews said.
