China ‘failing to deliver’ on licence deal

Date: 21/09/00

By Warren Giles

CHINA has been accused of dragging its feet over implementation of the deal it struck with the EU to pave the way for the country's entry into the World Trade Organisation.

The May agreement was supposed to result in European insurance firms being given licences to trade in China, but these have failed to materialise.

Beijing originally promised to share out seven licences between Union member states within two months, but Commission negotiators are still pushing China to live up to its commitments. "We are simply asking for what we agreed in Beijing, nothing more and nothing less," said senior negotiator Karl Friederich Falkenberg. So far, only two licences have been delivered, to Italy's Assicurazioni Generali and the Netherlands' ING Group.

Fears that Beijing may not deliver on its commitments in many sectors abound. Against this backdrop, the UK, French and German governments, each of which were promised licences from China's newly-created regulatory commission, have lodged complaints with Beijing.

The EU-China deal also offered the European industry joint ventures in Chinese life assurance and insurance businesses within three years. The US will have to wait five years for the same privileges under its 1999 bilateral deal.

Chinese accession to the WTO, fitfully negotiated over the past 14 years, depends on the tortuous process of turning all the one-to-one deals into a single accession document. But the US this month demanded a similar number of licences for its insurance firms, further denting hopes of a speedy solution.

The insurance issue is also hampering efforts by the Swiss to close their own bilateral deal with China. Switzerland and Mexico are the only WTO members still negotiating bilateral deals.

China has been accused of dragging its feet over implementation of the deal it struck with the EU to pave the way for the country's entry into the World Trade Organisation.