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Thursday July 1, 11:58 pm Eastern Time
Japan seeks China WTO deal ahead of PM's visit
By Teruaki Ueno
TOKYO, July 2 (Reuters) - Japan is keen to strike a deal with China on Beijing's bid to join the World Trade Organisation before
Prime Minister Keizo Obuchi visits China next week, but there are doubts whether a pact can be sealed in time.
Japanese government officials said this week an agreement may not be reached in time for Obuchi's three-day visit from July 8,
since the two countries are still far apart on Tokyo's demand for China to further open its service sector to foreign competition.
Japan wants China to grant foreign firms access to its service sectors, such as distribution, construction, telecoms and financial services, in exchange for formalising its
oft-pledged support for Beijing's bid to join the WTO.
''We are hoping to reach an accord by the time the prime minister visits China. But wide gaps remain in some areas,'' a Japanese Foreign Ministry official said.
''We have been holding bilateral negotiations at various levels intermittently,'' he added. ''China is a tough negotiator and we do not want a settlement with which we
are not fully happy.''
The official said China is being particularly tough on foreign access to its telecoms and construction markets.
Under WTO accession rules, any WTO member can request two-way talks with a proposed member and thus effectively block its entry until bilateral trade
differences are resolved.
Officials said fraying of Sino-U.S. ties following NATO's bombing in May of the Chinese embassy in Belgrade was affecting the bilateral talks between Tokyo and
Beijing.
''China hardened its stance, apparently because of the strained relations between China and the United States,'' one Japanese official said.
Washington, meanwhile, is watching over Tokyo's shoulder to make sure it does not cut a deal just for the sake of making Obuchi's trip a success.
''We are doing our best to conclude the negotiations by the time the prime minister goes,'' one government source said. ''That would be a big souvenir. But the result
must be credible to everyone, including the United States.''
Beijing, though, may not be able to drag its feet too long because its Taiwan is stepping up its own efforts to become a full WTO member, the first official said.
Failure by China to join the WTO before a new round of global trade talks is launched in November could delay its entry by several years.
Beijing came close to sealing the crucial part of its bid to enter the organisation in April, when Premier Zhu Rongji made significant concessions to U.S. trade
negotiators during a visit to Washington.
Zhu was later accused by powerful domestic forces of selling out state enterprises and poor farmers in his eagerness to join the WTO, and China froze its WTO talks
with Washington after NATO's bombing of its embassy in Belgrade on May 7, which killed three Chinese reporters.
Both the United States and China said earlier this week the ball was in the other's court.
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