¶*** Talks Get China Near Entry Into WTO...
Agreement Reached On Crop Subsidies
By Naomi Koppel Associated Press Thursday, July 5, 2001...
GENEVA, July 4 -- After 15 years of knocking at the door of the World Trade Organization, China is finally on the verge of entering the global trade forum.
Officials said today that after six days of talks at WTO headquarters, just about every aspect of terms of membership was settled, clearing the way for China to join the Geneva-based body soon.
"This meeting has resulted in a major breakthrough in all the issues regarding China's accession," said Pierre-Louis Girard, the Swiss diplomat chairing the talks.
"As a result of this development I think we can with some confidence envisage a wrapping up of this process, which has lasted now for 15 years, in what I hope will be the very near future," he said.
Chinese chief negotiator Long Yongtu said he would stay in Geneva until the next round of talks, scheduled the week of July 16, to speed things along.
The hope is that China's entry into the WTO can be officially endorsed at November's ministerial meeting in Doha, Qatar, to add gloss to what are otherwise likely to be tricky discussions on whether to launch a new round of trade talks following the collapse of the Seattle conference in 1999.
Under this scenario, China would become a full member early next year.
"After going through this long negotiation process we know it is still not time for celebration, and there is still a lot of work before us," said Long.
However, Girard listed a series of areas where agreement had been reached, including patents and other intellectual property rights; subsidies; agriculture and anti-dumping measures.
One of the outstanding arguments over agriculture was apparently resolved today, relating to concern felt by developing countries about a U.S.-Chinese deal on agricultural subsidies.
Under WTO rules, developing countries have the right to subsidize 10 percent of agricultural output, but Washington refused to accept that figure for China, saying it was not a developing country. The two nations finally agreed on 8.5 percent.
India, South Korea and Malaysia were concerned that this may set a precedent, and might even prompt the United States to demand stricter subsidy terms for developing countries in the future.
They therefore insisted that the final WTO agreement must contain a sentence stating that the U.S.-China bilateral deal does not set a precedent. Washington rejected this.
Girard refused to elaborate on the nature of the compromise. But he said that the wording of the WTO text would make it clear that the agricultural subsidy commitments "are solely those of China and will not prejudice developing countries' existing rights or future negotiations."
The biggest remaining problem to finalizing the Chinese terms of entry appeared to be over what constitutes a "branch" of a company -- an issue linked to U.S. insurance giant American International Group Inc.
Under the membership agreement, new companies entering the life insurance market in China must have 50 percent Chinese ownership.
AIG claims that it is exempt from this because it is already doing business in China. But it is not clear whether a new AIG office would be a branch of the head office or would constitute a new company -- in which case the 50 percent ownership rule would apply.
The issue has caused strife between the United States and the European Union, which insists that the same rules must apply to all insurance companies. EU companies operating in China are joint ventures, with a high level of Chinese ownership.
Beyond the WTO-wide talks, China is still trying to settle a bilateral deal with Mexico. That also may hold up the process as other nations wait to see the details of the Mexican agreement.
Other countries waiting to join the 141-nation WTO include Russia, Saudi Arabia and Vietnam.
