China wins pledge on WTO entry

Date: 18/06/1998

By Shada Islam

THE EU is struggling to inject new momentum into China's efforts to join the World Trade Organisation.

Both Trade Commissioner Sir Leon Brittan and China's Foreign Trade Minister Shi Guangsheng have promised to make a "determined effort" to secure WTO entry for China by the end of 1999. They say that the planned start of a new multilateral trade round in 2000 gives the long and difficult negotiations on Chinese membership an "added urgency".

The EU is also convinced that entry into the WTO would give an added spur to Beijing's economic reform efforts.

The joint EU-China pledge is well-timed. China's WTO ambitions are set to be one of the key topics discussed by US President Bill Clinton and Chinese Premier Zhu Rongji when they meet in Beijing later this month.

EU officials deny that the Union is seeking to score points with Beijing before the Clinton-Rongji summit. But Brittan's public support for China's WTO membership, and the specific mention of 1999 as a possible date for entry, should strengthen Rongji's hand in talks with Clinton, whose administration has traditionally taken a tougher line on China's bid to join the WTO than Europe.

Although China has tabled some new offers to slash tariffs and open up its services sector to foreign competition, Beijing's current focus appears to be on domestic economic reform rather than trade liberalisation.

As a result, say EU and US officials, the concessions made so far are not good enough and need to be improved substantially. The fear is that unless Rongji puts market-opening and trade liberalisation higher up his economic agenda, the 12-year-old negotiations on China's WTO entry could progress even more slowly.

"Our message is that immediate trade liberalisation is part of the medicine needed to nurse the Chinese economy to health," said one EU official.

The Union argues that European and other foreign banks which are given permission to operate in China will not only create jobs in the country, but also provide the financial backing needed to launch new businesses.

For the moment, however, this message does not appear to have had an impact in Beijing. "They keep coming to Geneva with small bits and pieces of market-opening offers," said one trade expert. "But if a negotiation of this complexity is to be finished, then the trade ministry in Beijing will have to take charge and insist that things get moving."