OPENING TRADE

November 15, 1999
		Following this background report, Margaret Warner leads a discussion on the trade deal struck between China and the U.S. and how it might pave the way for China's entry into the World Trade Organization.

Nov. 15, 1999: Experts discuss the U.S.-China trade deal Nov. 2, 1999: China at 50 Sept. 27, 1999: The world market. April 16, 1999: China's business Feb. 26, 1999: Dealing with China Oct. 20, 1998: Declining demand in Asian hurts U.S. farmers July 2, 1998: An Online Forum on President Clinton's China policy June 24, 1997: China retains Most Favored Nation trading status Complete NewsHour coverage of Asia     World Trade Organization U.S. Trade Representative Chinese Embassy

SPENCER MICHELS: The major trade deal signed by U.S. And Chinese leaders after 13 years of fits and starts brings China a giant step closer to joining the World Trade Organization. When and if that occurs, China will be obligated to cut tariffs an average of 23 percent over a period of five years or longer. U.S. Trade Representative Charlene Barshefsky spent six days in Beijing negotiating the economic accord. Today she called the deal profound and historic. CHARLENE BARSHEFKSY: The United States and China have had a rather tumultuous relationship, as you know, ups and downs, lots of swings. But an agreement of this sort, with its breadth, with its scope, with its emphasis on rule of law, with its consistency with China's own internal reform process can help to anchor the relationship between the United States and China in a most fundamental way. SPENCER MICHELS: Under the deal China agreed to lower tariffs and other protective trade barriers in a broad range of industries, from agriculture and telecommunications to financial services and automobiles. That gives American exporters greater access to a billion customers and a $4 trillion economy. In return, China receives White House backing for membership in one of the world's most important economic clubs: The World Trade Organization. With more than 130 member countries, WTO grants the same free trade privilege to every one of its members. China has been clamoring to join that club because it wants to sell its products abroad. But China will also have to abide by a long list of WTO rules governing its trade relations and business practices. In April, the two countries came very close to a trade deal. Chinese Premier Zhu Rongji came to Washington with WTO on his wish list. In the end though, he and President Clinton were not able to bridge the gaps. A month later the U.S. bombed the Chinese embassy in Belgrade. And that helped put the trade negotiations on ice until recently. The next stage of the process for China is similar negotiations with the European Union and other influential members of the WTO. For the U.S., the arena moves to Congress where lawmakers will have to vote on what's known as permanent, normal trade relations status. Such status would provide Chinese exporters permanent access to low tariffs that most other countries already get from the U.S. The AFL-CIO opposes the agreement and vows to fight it. But White House officials predict Congress will approve the deal. Gene Sperling, Economic Adviser: We don't expect it to be easy, but we expect that when people see this deal, see the agreement and understand the importance of this for the U.S.-China relationships and the future of the global economy, they will understand that this is in our nation's interest. SPENCER MICHELS: WTO members meet in Seattle at month's end. China will attend probably as an observer and could join the group sometime this winter.