- The Washington Times - Thursday, March 30, 2000

China's prime minister continued talks with the European Union yesterday about joining the World Trade Organization while, at the same time, putting the United States on notice over renewed Taiwan tensions.

Prime Minister Zhu Rongji met for more than an hour with European Union Trade Commissioner Pascal Lamy on the second day of new talks on opening China's long-closed markets.

Though the European Union billed the meeting as a positive sign, officials sought to dampen expectations for a speedy agreement.

"The fact that we met Mr. Zhu this early on in the process is a reflection of the importance that both sides attach to what we're doing," said Anthony Gooch, Mr. Lamy's spokesman.

Also yesterday, Mr. Zhu told President Clinton's top security adviser, Samuel R. Berger, that the election of a new, independence-minded leader in Taiwan had placed U.S.-China relations at an "important, if not critical, juncture."

Chinese leaders have grown suspicious of Washington's intentions toward Taiwan. Beijing particularly is worried about possible sales of sophisticated warships and missile defenses to the island as well as proposed U.S. legislation to formalize ties with Taiwan's military.

China sees unification with the island, which split off 51 years ago amid civil war, as a cherished national goal.

Mr. Berger was in Beijing for two days of meetings to appeal for Chinese restraint in the wake of the election of Chen Shui-bian, whose party advocates formal independence for Taiwan. Ahead of the March 18 election, Beijing threatened to use force against Taiwan. It raised tensions with Washington, which maintains close, though unofficial, ties with the island.

Reunification with Taiwan and WTO entry are key, though potentially conflicting, goals of the current Chinese communist leadership. U.S. lawmakers friendly to prosperous, democratic Taiwan, have warned that Chinese threats against the island may prompt them to block moves vital to implementing Washington's agreement with Beijing on WTO entry.

After 14 years of trying, China has made joining WTO this year a priority. It hopes the rules-based WTO will bring in foreign investment and force long-protected state industries to make reforms they have resisted.

Mr. Zhu intervened at critical moments during China-U.S. negotiations in November, helping forge a market-opening deal that cleared Beijing's biggest hurdle to joining the WTO. China still must reach separate agreements with eight WTO members, the 15-nation European Union foremost among them.

Mr. Lamy joined the talks in Beijing this week to help deal with thorny political issues blocking a final agreement that the sides say they hope to reach during the talks.

He opened Tuesday's session with Chinese Foreign Trade Minister Shi Guangsheng and the two met again for nearly two hours yesterday after the Zhu meeting. They were to meet again this morning, Mr. Gooch said.

Both sides have started to discuss the "nitty gritty of the political issues," Mr. Gooch said.

Neither side has publicly detailed the obstacles to the agreement. officials, speaking on the condition of anonymity, have said Europe wants greater access to China's automobile, insurance and telecommunications markets and more licenses for insurers.

Negotiators are pushing for more concessions than China granted the United States last November, although Chinese officials have hinted they would be hard-pressed to allow that.

The U.S. pact gives foreign companies the right to own up to 50 percent of Chinese telecommunication companies and secures wider access for foreign insurers and bankers, who are now limited by tight geographical restrictions and an erratic licensing process.

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