China livid over US Gatt stance

Sino-American trade relations have suffered a setback after the collapse of China's attempt to re-enter the Gatt world trade agreement by the end of the year. Peking yesterday hit back at the US for tabling "excessive demands, in a bid to obstruc t re-entry".

But the real crisis could come next week in a separate dispute with the US, which threatens to impose $800m (£516m) of trade sanctions for violation of intellectual property rights.

The latest round of Gatt talks broke up in Geneva on Tuesday over the terms for China's re-entry. Peking has been conducting an intense campaign to become a founder member of the World Trade Organisation (WTO), which will replace the Gatt on 1 January next year.

Peking's sharpest words were aimed at the US, which has been the most forthright in arguing for more tariff reductions and greater market access than China was prepared to accept. In Peking, a spokesman for the Ministry of Foreign Trade and Economic Co-operation said: "They broke their promises of `staunch support' for China's resumption of its status as a signatory party to Gatt."

China and the US are meanwhile locked into parallel bilateral negotiations over intellectual property rights which reach a deadline next week. China has until 30 December to enforce copyright laws or face sanctions on $800m of Chinese exports, the amoun

t that the US says its companies lost to trade piracy last year.

Last week, negotiations were suspended with the US saying that Peking had made no "serious offers". Wu Yi, the Chinese Foreign Trade Minister, said: "The day when the US produces its list for retaliation will be the day when China produces hers."

The focus of the Gatt stalemate was China's insistence that it should be a "developing country", which would give it the maximum time to reduce import tariffs and comply with free trade membership rules. The USled opposition to China being admitted on such easy terms.

t Geneva - Peter Sutherland, the head of Gatt, has agreed to serve until 15 March as the first chief of the WTO, Reuter reports.