Clinton tries to close huge deal that would get China into WTO

WASHINGTON -- After a series of secret exchanges with Beijing over the past two weeks, the White House is racing to close a deal by the end of this month that it hopes will pave China's way into the World Trade Organization, even if Congress cannot pass judgment on the agreement until next year.

Sparked by a phone call from President Clinton to President Jiang Zemin late at night on Oct. 16, Washington and Beijing have since engaged in what one official called an "intense set of interactions." Nonetheless, senior administration officials say that there is only a 50-50 chance they will be able to close the huge deal, which Clinton now views as his best shot at stabilizing U.S. relations with China during his last year in office.

The White House has never publicly described that call, nor has it described an internal strategy debate presided over by the White House chief of staff, John Podesta, over how to close the elusive deal. But according to Chinese and U.S. officials, Clinton offered in the call to make the first move to break a long stalemate in the talks, volunteering to send China's leaders the details of a deal he characterized as Washington's bottom line.

Those details have not been disclosed, but areas up for discussion include telecommunications, financial services, textiles and anti-dumping sanctions, among others.

The initiative reveals how desperately Clinton is attempting to put back together the huge trade deal he walked away from in April, a move his aides say he now deeply regrets.

While some in the White House say that the deal offered in April would still not satisfy the administration, one top official mused last week, "If we could get it again, we'd probably take it and run."

The moment of maximum U.S. leverage to strike a deal is fast approaching, as Clinton prepares to open a meeting of the world's trade ministers in Seattle on Nov. 30. That session is expected to set the agenda for a new round of global trade talks that will take years -- and which China can influence only if it clearly is about to join the group that sets the terms of world trade.

Since Clinton's conversation with Jiang, trade officials have been working to put together a draft of an agreement, based on the U.S. understanding of the deal that didn't happen in April. But the process is made more difficult by continuing disagreements between China and the United States about what concessions China's premier, Zhu Rongji, brought with him on that trip.

Moreover, the White House's decision to publish a long list of those concessions so inflamed some powerful Chinese business executives and their political patrons that China has been forced to pull back, according to people familiar with the negotiations.

For example, it is no longer clear that China is still willing to let U.S. firms own 51 percent of Chinese telecommunications companies. But if the U.S. trade representative, Charlene Barshefsky, struck a deal that gave U.S. telecommunications firms less of an inroad into the booming Chinese communications market, she would have to make the case that she extracted other concessions that went beyond China's offer in April.

"They clearly still want a deal and want it soon," one administration official who has been in touch with the Chinese said recently. "But it's becoming clear it won't be exactly the same deal. The politics have changed."

One of the mysteries that the White House has not yet solved is whether Jiang is still committed to striking a deal, especially at a moment when he is under growing economic pressure at home. Clinton was clearly frustrated in New Zealand in early September, when Jiang dragged his feet in restarting negotiations.

His Oct. 16 call was followed up a week later with a trip to China by Treasury Secretary Lawrence Summers. While Summers was not sent to negotiate -- Jiang and the country's top trade negotiators were all in Europe -- he saw Zhu and reported that the embattled prime minister was still committed and eager for China to join the trade organization.

The competitive pressure created by opening China's markets, Zhu once again told Summers, would help spur China's own reforms.

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