U.S. WARNING ON PACT
The EU has not said what the stumbling blocks were, but European business sources familiar with the talks said Brussels was
holding out for concessions in insurance and telecoms beyond those in China's WTO deal with the United States in November.
As trade talks originally expected to last two days ran overtime in Beijing, lawmakers in Washington said China had put its
landmark WTO deal with the United States in peril with new military threats against Taiwan.
Beijing gave new ammunition to its enemies in the U.S. Congress trying to scupper the WTO deal with a policy paper on Monday
which threatened war if Taiwan dragged its heels indefinitely on reunification talks.
Senators on the Finance Committee said on Wednesday the trade pact was in trouble because of China's threat to Taiwan, which
outraged many U.S. lawmakers, staunch supporters of Taiwan.
''The reckless threat to use force against Taiwan over the future of cross-straits relations and the recurring human rights violations
will necessarily affect the Senate's consideration of the agreement,'' said committee chairman William Roth, a Delaware
Republican.
Commerce Secretary William Daley conceded China was making it harder for the administration to sell the trade agreement on
Capitol Hill. ''I believe that (the Chinese) want a deal, but if they continue to do things that make it harder to get a deal, then
maybe that judgment would change,'' he said.
STORMY U.S. VOTE AHEAD
In exchange for China's reduction of trade barriers, the Clinton administration must convince the Republican-controlled Congress
to grant Beijing unconditional access to U.S. markets -- so-called permanent normal trade relations (NTR) status.
Republican leaders expect Congress to vote on permanent NTR by August. Denying China permanent NTR status would not
keep it out of the WTO, but would mean that Chinese market-opening offers would not apply to the United States.
State Department spokesman James Rubin said China's threat to invade Taiwan ''shouldn't interfere'' with congressional
deliberations over the trade pact.
Despite stiff resistance from labour unions and other China critics, Daley said he was confident Congress would approve the trade
agreement this year. ''We will win,'' he said.
Chinese Foreign Ministry spokesman Zhu Bangzao reiterated on Tuesday Beijing's demand that Washington grant it permanent
NTR status ''promptly and without attaching conditions.''
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