.c The Associated Press
By CHARLES HUTZLER
BEIJING (AP) -- Domestic resistance to opening China's markets has caused Chinese leaders to retreat from trade concessions the United States thought it won last month, a senior EU official said Thursday.
The assessment by European Commission Vice President Leon Brittan confirms that momentum for getting China into the World Trade Organization has slowed since U.S. President Bill Clinton rejected broad market-opening offers Premier Zhu Rongji made in Washington.
Since Zhu's return to China two weeks ago, opposition among protectionist officials has coalesced. A U.S. negotiating team came, but left after running into new obstacles. The powerful telecommunications minister tendered his resignation, partly in protest over the Washington concessions, Western diplomats and industry insiders said.
Brittan reported that an EU trade negotiating team ``made no new progress'' in 10 days of talks with the Chinese. Brittan, who is the EU's acting trade minister, spent two days presenting EU demands to Chinese leaders.
``I was not expecting dramatic results now, and of course I am very well aware of the domestic pressures on the Chinese government,'' Brittan told reporters.
In Geneva, meanwhile, the WTO was trying anew on Thursday to break a deadlock over selection of a new director-general. The meeting -- the fourth since last Friday -- comes nearly a week after Renato Ruggiero left office and a year after he announced his intention to do so.
Brittan said that in a meeting Wednesday, ``Premier Zhu stressed the major concessions made by China in Washington and indicated that he had a limited room for maneuver.''
During Zhu's April 8 meeting with Clinton, the two sides came as close as they have to striking a deal in 13 years of fitful bargaining by China to enter world trade's rule-making body. Afterwards, the United States released a list of stunning concessions by China, throwing open previously closed sectors such as agriculture, telecommunications and insurance.
Foreign Trade Minister Shi Guangsheng, who spent 3 1/2 hours with Brittan on Thursday, afterwards told Chinese reporters that the U.S. list included issues still under negotiation and American demands China has never agreed to, the official Xinhua News Agency reported.
Brittan and his negotiating team found Chinese negotiators balking over the 51 percent foreign ownership in telecommunications and insurance ventures the United States believed China agreed to last month.
China's offer now stands ``somewhat short'' of the ``high-water mark'' claimed by Washington, Brittan said. ``We too would like to get back to where the U.S. thought it was.''
U.S. negotiators who left Beijing last week had a similar experience. Chinese negotiators backpedaled on reinsurance and brought up new restrictions on access to the telecommunications services, said a Western diplomat familiar with the talks. The diplomat spoke on condition of anonymity.
``There is no doubt at all there has been criticism in China on the extent to which they have gone with the Americans,'' Brittan said. He added that China may need ``a period of consolidation, reflection and consultation'' before it can begin serious bargaining.
Despite the setbacks, the EU wants China in WTO by year's end, Brittan said. U.S. negotiators, who return to China in 10 days, had hoped to reach an agreement by June.
In talks Thursday, Foreign Trade Minister Shi Guangsheng provisionally offered to lower tariffs on some goods Brittan did not identify. If agreed to by Zhu, the lower tariffs would be progress, but there was a ``considerable way to go.''
``It was inconceivable'' a final deal will be struck in time for the visit next week by German Chancellor Gerhard Schroeder, who holds the EU's rotating presidency, Brittan added.
AP-NY-05-06-99 1121EDT
Copyright 1998 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without prior written authority of The Associated Press.