CHINA PUSHING U.S. TO RESTORE CUT QUOTA

Byline: Jim Ostroff

WASHINGTON — With China’s president scheduled to meet here late this month with President Clinton, one of its top trade officials has been turning up the heat on the administration to deliver on what it claims was a promise by the U.S.’s chief textile negotiator to restore quota that had been cut last year for transshipping.
Li Dongsheng, who heads up China’s foreign trade administration, during a Sept. 24 Beijing meeting, presented the U.S. Customs deputy commissioner a diplomatic note asserting that at bilateral textile talks concluded in February, the U.S. “promised to recredit quotas to China for the alleged transshipment cases of 1996 after going through necessary domestic procedures.”
A copy of the note, obtained by WWD, was sent by James Sasser, the U.S.’s China ambassador, to Rita Hayes, the chief U.S. textile negotiator and textile ambassador.
Trade observers familiar with this issue, including several in government, characterized the Li note as a serious matter, as it was delivered so near to the Oct. 29 state visit here by Jiang Zemin, China’s president. The visit is viewed as key by both sides in easing troubled relations that have existed since the 1989 Tiananmen Square crackdown.
Li in June sent a cable to Hayes complaining that she had failed to take the promised steps to restore at least part of the $17.5 million worth of quota cuts the U.S. made in 1996 for alleged Chinese transshipping.
“I believe that this issue, as part of the package solution, has already been resolved in the [February] bilateral negotiation, and we both have reached an understanding toward it,” Li wrote in a letter to Hayes, also obtained by WWD. “According to our discussion, the only thing left is that the adjustment shall be published in your Federal Register…,” Li wrote, concluding, “based on this understanding, the Chinese side actively took corresponding measures, and with our joint efforts, we concluded our bilateral agreement.”
The issue might be discussed here during a Nov. 5-7 meeting proposed by China to address another transshipping allegation made by the U.S. this summer. The U.S. has not confirmed the meeting date. China had declined to participate in a meeting proposed by the U.S. for September, saying it needed more time to prepare for the meeting.
Meanwhile, it was learned China has still not signed the four-year textile trade pact. The U.S. is abiding by its terms nonetheless, said Troy Cribb, Commerce’s top textile official and chairman of the Committee for the Implementation of Textile Agreements.
Hayes, who has been nominated to be the U.S. ambassador to the World Trade Organization in Geneva and is awaiting Senate confirmation, has not returned telephone calls seeking comment on Li’s contentions. Caroyl Miller, the deputy chief U.S. textile negotiator, and Cribb both said the U.S. only pledged to review any new evidence China presented about the 1996 chargebacks.
“Clearly,” Miller said of Li’s contentions, “he’s overstating what was agreed to in bilateral negotiations.”
Several trade observers said that while nations, including the U.S., sometimes posture to their domestic industries to put the best face on an agreement, it is unlikely that China would invent out of whole cloth the supposed quota-restoration pledge.
Controversy has swirled around the U.S.-China textile pact since the talks. During Hayes’s Senate confirmation hearing, questions were raised about her meeting during the negotiations with Stephen Lau, a Hong Kong-based maker whom Hayes acknowledged to be a Chinese trade adviser. Hayes maintained this was a casual meeting and that during a ride with him to China’s trade ministry, no discussion was held about the ongoing negotiations and nothing was said that compromised the U.S. position.

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