Beijing Clears Big WTO Hurdles

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More than 14 years after it first applied for membership, China has reached agreement with members of the World Trade Organization on the major issues that were delaying its entry into the club of global trading nations, officials here and in Geneva said Wednesday.

Negotiators have "reached full consensus on the main problems remaining in the multilateral negotiations," Foreign Trade Ministry spokeswoman Gao Yan told China's state television in Beijing. "This shows the substantive negotiations on China entering the WTO have already been completed."

"I can say we have achieved a major breakthrough on the important issues of China's accession," Pierre-Louis Girard, chairman of the WTO working party at negotiations, told reporters in Geneva. "I think I can say with confidence that we will be wrapping up this process in the very, very near future."

After a week of intense meetings in the Swiss city, several sticking points, including differences over agricultural subsidies and import restrictions, were resolved. Most of the remaining negotiations also were concluded, and only talks with Mexico and a relatively minor question concerning foreign ownership of insurance branch offices in China remain.

The WTO sets the rules for world trade and adjudicates trade disputes between members. Although the negotiations have been couched in the arcane, oft-confusing language that defines the rules of international commerce, Beijing's entry into the organization--virtually assured by early next year--is viewed as a watershed event for both China and the world community.

For the globe's trading nations, Beijing's accession will mean a powerful new voice participating in WTO debates--a voice that frequently opposes U.S. interests and is deeply suspicious of the West in general.

For China, entry will represent an unprecedented opening of its economy and society to foreign products and influences, from oranges to ideas. That the move comes amid the country's gradual transition from a state-controlled to free-market economy adds up to a major gamble on the part of Beijing's aging Communist leaders.

Membership will also bring new diplomatic tests for China, which has long supported the political agenda of developing countries when they confront the West but which now finds itself competing directly against many of those countries to sell low-cost manufactured goods to the industrialized world.

The week of meetings that ended Wednesday involved representatives from the 63 countries who are negotiating separate agreements with China on the terms of its entry.

A senior WTO official in Geneva who requested anonymity said the remaining unresolved issues were not central to the negotiating process. The differences with Mexico involve how to time the phasing out of more than 1,400 anti-dumping duties on Chinese products.

"The Mexicans have said all along they are not going to hold up an agreement," the official said, adding that China's senior trade negotiator, Long Yongtu, was scheduled to meet Mexico's WTO ambassador Monday and the country's trade minister shortly thereafter.

Differences over insurance reportedly center on the level of ownership foreign companies are allowed for new branches they establish in China.

The successful talks in Geneva followed important agreements last month between China and the world's trading giants, the United States and the European Union. Collectively, the progress reflects a revived sense of urgency to end the marathon diplomatic effort and finally bring Beijing into the 141-member trading group.

China applied for membership in early 1987, when the organization was known as the General Agreement on Tariffs and Trade. Negotiations with the United States were finalized in November 1999, and President Clinton pushed hard but failed to get the entry process for China completed before he left office last January.

The inauguration of President Bush brought a review of U.S. commitments and a lull in negotiating activity before the talks that were completed last month. Beijing also seemed happy to delay its entry at least temporarily to win additional time to prepare for the impending changes.

The renewed urgency to bring China in was sparked mainly by a desire to ensure Beijing's involvement in efforts to launch a new round of global trading talks at a WTO ministerial-level conference in November in Qatar. There is also a growing unease at the anomaly of one of the world's largest trading nations remaining outside the rule-setting group.

With several months of laborious bureaucratic work still required to finalize and standardize the thousands of tariff schedules and market-opening commitments China has made during the long negotiations, trade officials at the WTO headquarters in Geneva noted that it would still be a push to complete the task by November.

Even though a formal signing ceremony of the negotiated agreements is now expected to be a centerpiece of the meeting in Doha, Qatar's capital, Beijing probably will not be in a position to take its seat there. China's National People's Congress has to first ratify the terms of agreement--a process that senior Chinese officials have said could take months.

WTO officials said representatives of the 63 members negotiating with China were scheduled to meet again this month to iron out the lingering differences and begin studying the final agreement's draft annexes and protocol.

During the past week, China finalized agreements with four Latin American nations: Panama, El Salvador, Nicaragua and the Dominican Republic.

A group of developing countries, including India, Malaysia, Cuba and Pakistan, also won their fight for written clarification that terms of a compromise limiting China's agricultural subsidies to 8.5% of total production value did not apply to other developing countries.

Under WTO rules, developing economies are allowed to spend up to 10% on subsidies, helping their farmers to survive in a more open global market. At the insistence of the U.S., which rejected China's claim that it is a developing nation, Beijing agreed to give its farms the lower rate. Other developing nations wanted written assurances that they would not be forced to match China's level.

Commenting on the issues still to be concluded, Chinese Foreign Ministry spokesman Zhu Bangzao was more cautious than his Trade Ministry counterpart on the situation in Geneva.

"It's still not over," he said. "We have to make a lot of efforts to assure a win-win-win situation for China, the WTO and its member nations."

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Times staff writer Marshall reported from Hong Kong and special correspondent Kuhn from Beijing.

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