Beijing talks to focus on China GATT bid

TWO delegations from the office of the US Trade Representative (USTR) will arrive in Beijing next week for talks on China's accession to the General Agreement on Tariffs and Trade (GATT) and intellectual property rights protection.

The GATT delegation comes just one month after US Treasury Secretary Lloyd Bentsen said, during a visit to Beijing, that China had made significant progress in meeting the requirements for re-entry into GATT.

There is optimism on both sides that China and the US are now a lot closer to an agreement.

Progress on the convertibility of the Chinese currency and on meeting some of the requirements of the International Monetary Fund would all aid China's bid to resume its place in the GATT, Mr Bentsen said.

China's decision to allow foreign banks to engage in local currency business on a limited, experimental basis was also an encouraging sign, he said.

Talks on Monday and Tuesday are expected to focus on making further progress on the liberalisation of China's trade and market systems.

However, there still appears to be a deadlock over the USTR's insistence that China agree to the imposition of an interim ''safeguard system'' to protect other countries from a surge in Chinese exports.

China's trade ministry has so far refused to accept the imposition of a safeguard system, claiming it was a discriminatory measure not required of other countries seeking membership of the GATT.

The USTR had conceded the measure was unique to China but said it was necessary because of the ability of the mainland's huge and rapidly growing economy to disrupt world markets.

The GATT delegation, headed by assistant US Trade Representative Dorothy Dwoskin, will also be seeking a commitment from Beijing to establish a market price economy.

Although China had claimed progress in this area, it had so far failed to make a written commitment, US negotiators said.

Talks on China's protection of intellectual property rights such as patents, trademarks and copyrights, which begin on Wednesday, are not however expected to yield much progress.

The United States has already placed China on a Special 301 priority watch-list because of its alleged failure to enforce its laws and regulations concerning intellectual property right protection. Certain key issues remain unresolved.

The three days of talks in Beijing will focus on series of specific, technical issues in which the United States wants to see significant and rapid progress.

If China does not show good faith on these issues, US sources say, punitive Special 301 action may be taken within as little as six months.

Intellectual property right protection is now the major source of friction in the Sino-US trade relationship, with even pro-Beijing US business groups such as the US China Business Council saying China's record of intellectual property right protection left a lot to be desired.

''There is no effective protection in China,'' one council member stated bluntly on a visit to Beijing last December.