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U.S., China Step Up Efforts to Reach WTO Entry Agreement
U.S., China Step Up Efforts to Reach WTO Entry Agreement
Beijing, March 25 (Bloomberg) -- U.S. and Chinese officials are stepping up efforts to seal an
agreement on China's entry to the World Trade Organization in time for next month's visit to the
U.S. by Premier Zhu Rongji.
An agreement, after more than a dozen years of talks, could help open Chinese markets to U.S.
goods and reduce the U.S. trade deficit, which last year reached a record $56.9 billion and is
growing this year.
U.S. Assistant Trade Representative Robert Cassidy arrived in Beijing late yesterday, to hammer
out remaining differences between the two sides, a U.S. Embassy official said. The official
declined to comment on speculation that Cassidy may soon be joined by his boss, Charlene
Barshefsky, if the talks make progress. ''There's a willingness on both sides to get a deal done,''
said Norwell Coquillard, China country manager at Cargill Investments (China) Ltd.
U.S. officials and business groups say Zhu's involvement in the talks has been helped wring
several concessions from Beijing, including increased market access to a range of manufactured
and agricultural products. Zhu's first visit to the U.S. as Premier run from April 8 through April 15.
''Zhu Rongji's taking a direct role in the talks, we think, is one of the things that has led to the
more significant progress that we've seen over the last couple of weeks,'' Stuart Eizenstat, U.S.
Undersecretary of State for Economic, Business and Agriculture affairs said in an interview
yesterday. ''He has become directly engaged in this process.''
The two sides have yet to close many remaining gaps, including gaining Beijing's willingness to
limit its subsidies to state-owned enterprises and its use of ''national security'' labels to confine
foreign access to key industries such as telecommunications, according to business groups
familiar with the talks.
The U.S. is eager to see China's admission to the WTO. China is among the world's ten largest
trading nations and is home to one of its fastest-growing economies.
Politics
Weighing against an early resolution of China's 13 year- long bid to enter the body that regulates
world trade is possible opposition to any pact by the U.S. Congress. Many Republican lawmakers,
in particular, are angry about recent allegations China stole sensitive missile technology from the
U.S. in the 1980s, and used the know-how to upgrade their own warheads. ''We hope that the
Congress and the public will recognize that notwithstanding disputes and differences we have
with China that this is in our commercial and trade and economic interest,'' Eisenstat said. ''I hope
they recognize we can't let any one issue dominate the relationship and crater the whole
relationship. A significant amount of progress has been made and this is no time to retard that
progress by bringing other issues up.''
Progress
Chinese officials are hopeful of a breakthrough. 'If there is no new barrier, I think this time some
progress can be made,'' said Xu Xianquan, a WTO expert at the Ministry of Foreign Trade's trade
institute.
Eisenstat said yesterday that ''progress has been made across the board in both agriculture and
industry.'' He declined to provide further details.
Business groups in Beijing say the U.S. is confident that China will pledge to lower tariff barriers for
many key products U.S. companies are interested in selling to China. These include power
equipment, telecommunications equipment and other manufactured goods.
Agricultural trade remains a sticking point, though. China still refuses to allow shipments of wheat
from areas in the northwestern U.S. infected by the fungal disease Tilletia Controversa Kuhu, or
TCK.
The U.S. Agriculture department says the ban is based on poor research and costs the U.S.
about $100 million a year in potential wheat orders.
Other reports indicate progress is being made in opening China's service industry, in particular
banking, insurance, telecommunications and distribution.
China has offered to allow foreign banks to take up to a 50-percent stake in retail banking
ventures, the Asian Wall Street Journal reported today, citing unnamed sources close to the talks.
Foreign banks are generally limited to opening representative offices in certain cities, although
more than a dozen banks have been granted restrictive licenses to conduct business in the local
yuan currency in Shanghai and Shenzhen cities.
The offer to open banking matches similar promises already made public by China to allow more
foreign insurers to enter the market, though capping their ownership at 50 percent of any venture.
China has so far approved about nine foreign insurers to conduct business in Shanghai and
Guangzhou.
Telecommunications
Any promises by China to open its market for telecommunications services is likely to attract
interest from many foreign companies.
China has offered to allow foreign companies to take as much as a 35 percent share in local
telecommunications companies, although the U.S. negotiators are pushing for a 51 percent share
cap, the Asian Wall Street Journal reported. ''The question will be how long they can slow
implementation'' of the offer to allow part-ownership, said Duncan Clark, managing director of
B.D.Associates, a Beijing- based consultancy. ''The dates still haven't been nailed down yet.
One concession to U.S. interests may come during Zhu's visit, with an agreement to allow local
operators to put the U.S.-made mobile phone technology, CDMA, into commercial service.
Clark said China's second carrier, China Unicom, will probably win approval to build a nationwide
CDMA network, which could bring big orders for equipment and handsets from companies such
as San Diego-based Qualcomm Inc., which owns many of the basic CDMA technology patents,
Motorola Inc. and Lucent Technologies Inc.
CDMA, or cross division multiple access, is a rival to European GSM technology, or global system
for mobile communications, sold by companies such as Finland's Nokia AB, and Sweden's
Ericsson AB. Both companies count China, including Hong Kong, as their biggest market
worldwide. |
