China Posts Gains With WTO

By cementing a deal with Europe, China has cleared away the largest remaining hurdle in its bid to join the World Trade Organization and put the Asian nation within reach of membership in the powerful trade group by the end of the year, officials said Thursday.

Chinese Foreign Ministry spokeswoman Zhang Qiyue announced in Beijing late Wednesday that China and the European Union had resolved their disputes over foreign access to China’s lucrative insurance and retail markets. The details were not released.

EU Trade Commissioner Pascal Lamy said Thursday that the “political will” of the two governments cleared the way for China to join the WTO “in the coming months.” A WTO working committee on China is slated to meet in Geneva from June 28 to July 4 to hammer out final details.

“It’ll be close,” said David Bachman, a China economic specialist at the University of Washington. “But it really is a question of time and not fundamental issues.”

Tensions between the U.S. and China over the spy plane incident and U.S. weapons sales to Taiwan derailed WTO negotiations in the early months of the Bush administration.

But in recent months, the U.S. and other leading WTO members launched a last-minute push with the hope of finalizing China’s membership by November’s ministerial meeting in Qatar.

That would give the beleaguered WTO a boost after its disastrous 1999 meltdown in Seattle and allow China to participate if a new round of trade liberalization talks are launched.

Meeting a November deadline won’t be easy because China still has to wrap up bilateral deals with five Latin American countries, including Mexico.

Those countries are seeking ways to protect their producers from a deluge of low-cost Chinese goods once that nation joins the WTO.

“Everyone would be surprised if any of these other countries proved to be a major obstacle,” said Kenneth Lieberthal, a China expert at the University of Michigan. “The momentum is clearly there to get this done.”

Even if those agreements are wrapped up soon, China faces an arduous accession process to complete its 15-year goal of WTO membership.

The paperwork alone is daunting. The 63 members of China’s working committee must merge all their bilaterals into a single accession document, which must be approved by the WTO governing body and China’s National People’s Congress.

Once it is admitted to the WTO, China has agreed to open its market more widely to foreign goods, strengthen its legal system and abide by global trade rules on such issues as intellectual property and dumping.

In exchange, China gains the financial benefits of WTO membership that come when other countries drop their barriers to Chinese goods.

Agriculture was one of the most sensitive areas in the WTO talks, because China is not only one of the world’s largest agricultural producers but also has a huge farm population vulnerable to foreign competition. In the U.S.-China pact finalized this month, China agreed to limit its farm subsidies to 8.5%, which is below the 10% level allowed for other developing countries.