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Technology Stocks : The New Qualcomm - a S&P500 company -- Ignore unavailable to you. Want to Upgrade?

To: Caxton Rhodes who wrote (8490)	4/10/2000 11:54:00 AM
From: Ruffian	Respond to of 13582

China May Try to Stall EU WTO Pact Until After U.S. Vote By Poilin Breathnach Brussels, April 10 (Bloomberg) -- China may try to stall a pact with the European Union for its entry into the World Trade Organization until after the U.S. Congress has voted on its trade status, Europe's top trade official said, a position that could weaken the EU's bargaining position. China is refusing to give in to European demands for majority ownership of Chinese phone and insurance ventures, lower tariffs on cars and the abolition of state monopolies, European Trade Commissioner Pascal Lamy told European foreign ministers, according to briefing notes obtained by Bloomberg News. China can't join the WTO without the backing of the Geneva- based trade body's 135 members. The EU is the last major trading bloc whose support it must win for membership. Still, China, which has waited 14 years to join the WTO, could delay sealing a deal with the EU until after U.S. lawmakers vote on Chinese trade the week of May 22, the notes said. ``We will not adopt a position which would be dependent on whether Congress agrees to a deal,' Lamy said at a press conference during the foreign ministers' talks. ``We have our own agenda, our own position.' The U.S. bill would permanently lower U.S. tariffs on Chinese goods to the level America affords most other nations. So- called Permanent Normal Trade Relations are key to an accord on WTO entry reached between China and the Clinton administration in November. A third round of talks between the two blocs broke down three weeks ago and Lamy plans to make another trip to Beijing in the next few weeks to try and reach an agreement. The trade commissioner told foreign ministers he's reluctant to give China ``breathing space' in the talks, the briefing paper said. EU Demands The EU is demanding that China allow foreign companies to own 51 percent of telecommunications and insurance ventures after it enters the WTO. The U.S. accord agreed 49 percent ownership immediately on WTO entry, rising to 50 percent two years later. The EU even offered to let China delay majority ownership for 10 years after WTO entry in a bid to seal a pact, but Chinese Premier Zhu Rongji rejected that offer, the briefing notes said. The EU boasts the world's largest and third-largest makers of mobile phones, Sweden's Ericsson AB and Finland's Nokia Oyj, both of which claim China as their second-largest market after the U.S. France's Alcatel SA already has some 18 phone-equipment joint ventures in China, and plans to expand its business there. The EU also wants China to dismantle its state monopolies on oil, tobacco, silk, cotton and fertilizer, the paper said. The briefing paper indicated that the EU countries rank oil and tobacco as the most important markets, and could be prepared to make compromises on fertilizers and textiles. Automobiles In addition, the 15-nation bloc wants China to further chop tariffs on automobiles to between 17.5 and 20 percent from the 35 percent agreed with the U.S. in November. Tariffs on foreign cars can currently be up to 100 percent, depending on the make and model. Distribution for cars and auto-parts must also be improved, Lamy told ministers, according to the notes. Other European Union countries want the EU to stand fast on other trade issues, though Lamy told them they have to be ``realistic' in their demands, the paper said. The U.K., for example, wants China's tariff on imported gin lowered to between 10 and 20 percent from the current 65 percent. Germany, Italy, France and the U.K. also want tariffs slashed on items such as detergents, cosmetics, perfumes, jewelry and footwear. The bloc wants China to cut general tariffs, which can be up to 100 percent on some products, to a flat rate of about 7 percent -- twice the average in the 29 countries of the Organization for Economic Cooperation and Development. European banks, meanwhile, are eager to conduct local- currency transactions with Chinese companies as soon as China enters the WTO. Under the U.S. agreement, banks won't be able to do that until two years after China's entry and will have to wait five years to do retail business. The EU imported 42 billion euros ($40.2 billion) worth of Chinese goods in 1998 and exported goods worth 17 billion to China. EU service imports from China totaled 3.1 billion euros, while service exports to China were worth 2.5 billion euros, according to EU figures.