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Jasper Becker

Prospects of a breakthrough over mainland entry to the World Trade Organisation at the Asia-Pacific Economic Co-operation forum meeting in Auckland are being discounted by diplomats in Beijing.

  Last week, US Commerce Secretary William Daley hinted at the prospect of a deal within two weeks of talks resuming after a summit between US President Bill Clinton and President Jiang Zemin scheduled for September 12.

  US Under-Secretary of State for East Asian and Pacific Affairs Stanley Roth has also hinted at a resumption before the meeting's September 7 start.

  Yesterday, US Policy Planning director Morton Halperin held talks with Assistant Foreign Affairs Minister Wang Yi to focus on what the US embassy called 'long-term big-picture issues'.

 However, sources in Beijing said no trade visits were scheduled and neither side has issued a proposal.

  'Nothing is being done to justify these expectations,' the source said. 'Nothing has changed since April.'   That was when Premier Zhu Rongji, on a trip to the US, offered a series of concessions to facilitate entry to the WTO. When Washington made the terms public, Beijing withdrew some of the bargaining points.

 Diplomats said it would require a concerted effort to organise talks in the week remaining before officials left for New Zealand.

  Observers fear trade issues are becoming entangled with much bigger political issues, especially rising tensions over Taiwan.

  'The main reason why Mr Zhu made such a good offer in April was to avoid trade getting mixed up with Taiwan, to avoid further frictions,' an Asian diplomat said.

  The observers are searching for signs that both sides are ready to make symbolic gestures to ease political tensions.

  For example, Beijing could release a senior dissident, such as Xu Wenli, imprisoned after setting up a democracy party around the time of Mr Clinton's state visit last year.

  Xu, a veteran of the Democracy Wall Movement, has been reported to be in poor health, indicating he may be released on medical parole. Such carefully timed releases are used frequently.

  Meanwhile, some observers think the US could assuage mainland anger over the bombing of the Chinese Embassy in Belgrade by letting it be known that the Nato commander at the time, General Wesley Clarke of the US, had been forced to retire.

 Beijing wants a senior figure to take the blame.

  It remains to be seen whether Mr Clinton could do or say anything about Taiwan to calm Beijing which has been upset since President Lee Teng-hui's calls for 'state-to-state' relations.

  Against this background, some diplomats doubt whether the two leaders will quickly move to resume WTO talks without demonstrating unexpectedly strong political will.

  Mr Jiang must return from Auckland to defend his actions at the annual plenum of the Communist Party's Central Committee, which should meet before a military parade on October 1.

  'This will be a critical moment for the mainland to contemplate action against Taiwan,' said the Global Times, a paper published by the People's Daily.

 'If the US continues meddling in China's internal affairs and conniving with the separatist activities, then Sino-US relations will deteriorate and the situation will be hard to predict.'  Yesterday's article - like many appearing in the mainland press - beat the drum for a decisive military attack on Taiwan. Other articles propose a blockade or outline how an all-out military attack would succeed during the typhoon season.

  'It is like standing on the bridge of the Titanic and watching the iceberg get closer,' said one Asian analyst.

  'I don't think anyone is going to give way.'   With Taiwan's election campaign under way, the Kuomintang is not going to drop its stance. The Taiwanese leadership wants to make the most of the leeway offered by the rift. It has no interest in allowing Sino-American relations to improve.

  Mr Clinton has said the US does not support Taiwan independence and even if he wanted to, he could not stop the debate in Taiwan.

  On the other hand, if the mainland took military action before the elections, it would strengthen the independence movement and cause such an adverse reaction in the US it would jeopardise any chance of successful WTO talks.

  The calendar is tight for any trade negotiators hoping to wrap up a deal by November when a new multilateral round of WTO talks is slated to begin.

  If Beijing misses that deadline, it might have to wait another couple of years. In the meantime Taiwan could insist on unilateral entry as it is ready to join. This might win sympathy in US Congress and elsewhere.

  Another scenario would have the mainland continuing the war of words while going for a quick WTO deal and then tackling Taiwan next year.

  Then it will also be clearer whether Taiwan's leadership will take a harder or softer line. This would take the mainland to probably May before it might feel obliged to carry out any threats.

  If Mr Jiang decides he is in a hurry to cut a WTO deal then he may have to make sacrifices.

 The US is still looking to keep the agreements it thought it had won in April and indeed Mr Clinton had wanted more concessions on textiles, banking and anti-dumping. A sceptical Congress still needs to be convinced of any deal.

  Beijing is signalling it wants to resume talks but Mr Jiang still has to override vested domestic interests.

  Before normalising relations with the US, he must shelve the post-bombing demands. Beijing says it still has not received an explanation for the bombing nor agreed on compensation for damage to the embassy.

  It would take an unusually bold move by Mr Jiang to brush aside these considerations and personally push through a trade deal before November.

  One trade negotiator said: 'It could be done but it is a very sensitive time.

 'There are such internal and external difficulties that I fear that the mainland will miss the boat this time.' 



Beijing muted on US hopes for post-Apec meeting deal, writes Jasper Becker