China Goes Courting at Trade Conference : Tariff promise is linked to bid for entry into global alliance
A surprise--and welcome--development at last week’s trade meeting of Asia-Pacific nations was China’s announcement that it will slash its import tariffs by at least 30% and eliminate quotas on 170 products. Further praise, however, must be reserved for when Beijing actually makes the changes. Only then will it be possible to see which trade sectors will be opened and what impact the actions might have.
The United States imports a huge variety of Chinese consumer goods, ranging from toys to appliances. However, Beijing does not accept a comparable amount of American exports, creating an imbalance second only to Japan’s among U.S. trade partners.
The market-opening initiative, announced by Chinese President Jiang Zemin at the Asia-Pacific Economic Cooperation meeting in Osaka, Japan, is Beijing’s first major trade liberalization move since it opened up its markets in 1979. But China had a motive beyond lowering tariffs--namely acceptance as a member of the World Trade Organization. Being included in the global trade organization would create new markets for Chinese exports.
‘ROAD MAP’ FOR CHINA: The United States maintains that Beijing’s bid for membership depends on conformance to global, economic and trading rules and standards. At the APEC meeting, U.S. Trade Representative Mickey Kantor offered China a U.S. “road map” to follow in the quest for membership. The Beijing announcement was made soon afterward.
As Vice President Al Gore--a stand-in for President Clinton--put it, China’s actions “must be interpreted as part of a process of opening and harmonizing .J.J. calculated to lead to the meeting of all necessary requirements for WTO membership.” China has a long way to go in following the U.S. map. Other required stops along the way include lifting non-tariff barriers and agreeing to government procurement of foreign goods.
The Chinese announcement was the most noteworthy event at the Osaka meeting, where the 18 members of APEC agreed on an “action agenda” in pursuing their 1994 commitment to establishing free trade for developed countries of the region by the year 2010 and for developing countries by 2020.
Each member offered some step toward lowering trade barriers, but these concessions typically were measures already in place or previously announced.
The agenda dealt mostly with guidelines and principles. It included ambiguous language on the more contentious issues, such as opening agricultural markets. The APEC members promised to bring specific plans for trade liberalization to next year’s summit in the Philippines. At least there was an agreement on a blueprint for free trade.
CLINTON’S ABSENCE: The APEC gathering lost much of its worldwide audience without the presence of Clinton, who raised the profile of this fledgling group three years ago when he hosted the first summit of APEC leaders, in Seattle. The President stayed in Washington to deal with the budget deadlock between his Administration and Congress. But his absence does not mean that the Asia-Pacific region--economically the fastest-growing part of the world--is any less important to the United States. Clinton has assured Japan that he will reschedule his state visit.
Meanwhile, China’s pledge of trade liberalization was encouraging, in that it has stalled on meeting U.S. demands to open its markets in order to qualify for membership in the WTO. But Sino-U.S. relations are still delicate. Beijing’s commitment to cutting tariffs and ending some quotas will be measured next year when levies should be lowered on about 4,000 to 6,000 imported items. Traders around the world will be watching.
