Muted EU praise for China deal

Date: 18/11/1999

By Gareth Harding

EU OFFICIALS have cautiously welcomed the ground-breaking trade deal struck between China and the US earlier this week, but warn that a number of obstacles remain before the world's most populous country can join the World Trade Organisation.

"It is a good agreement and commercially viable. We just have to ensure it is balanced," said one.

European Commission officials are still poring over the details of the accord, which would see average Chinese import duties slashed from 22% to 17% and outlaw Beijing's use of export subsidies. But given Brussels and Washington's shared interest in opening up the Chinese market quickly, the deal is unlikely to present too many difficulties for the Union.

"About 80% of the deal to be concluded with China for its accession is common to the EU and the US - then there is the remaining 20% where they have their interests and we have ours. That will obviously require a separate negotiation," said a spokesman for Trade Commissioner Pascal Lamy.

Union negotiators made little progress in their last meeting with their Chinese counterparts at the end of October. Although they edged closer to an accord to cut tariffs on industrial goods, they remained far apart over market-opening in the banking, insurance and services sectors.

The EU is waiting for Beijing to come up with a better offer before the two sides meet again. But with the next round of global trade talks set to be launched in Seattle on 30 November, the Commission is under intense pressure to reach a speedy agreement with China.

United Nations secretary-general Kofi Annan said this week he hoped that separate negotiations with the Union and Canada could be handled "expeditiously and successfully". However, Lamy warned that the EU did not "want to sacrifice substance for a calendar".

EU officials have cautiously welcomed the ground-breaking trade deal struck between China and the US in November 1999, but warn that a number of obstacles remain before the world's most populous country can join the World Trade Organisation.