China May Delay Joining WTO

[Yoshie Furuhashi <furuhashi.1@xxxxxxx>]

China May Delay Joining WTO

By Clay Chandler
Washington Post Staff Writer
Tuesday, February 27, 2001; Page E02

SHANGHAI, Feb. 26 -- Chinese trade officials have signaled that
Beijing is likely to delay China's accession to the World Trade
Organization beyond October, renewing concerns among Western
executives and trade officials about China's commitment to join the
international trade panel.

The China Business Times, a state-run financial daily, reported today
that China's foreign trade minister, Shi Guangsheng, has dismissed as
"inaccurate" predictions that China is likely to be admitted to the
global trade group by early summer.

The newspaper said Shi's remarks were prompted by comments from top
European Union trade negotiator Pascal Lamy, who suggested in Hong
Kong last week that final negotiations regarding terms of WTO entry
for China could be concluded as early as March, with formal admission
following a few months later.

The newspaper quoted officials at China's Ministry of Foreign Trade
and Economic Cooperation as saying that rewriting China's domestic
legal code to conform with WTO rules would take a minimum of several
months -- precluding the possibility of China's accession within the
first half of 2001.

"It's hard to say whether this is real or just a negotiating ploy" by
Chinese trade officials, said Andy Xie, China economist at Morgan
Stanley Dean Witter & Co. in Hong Kong.  "So far the waiting game has
worked to China's advantage, giving its industries more time to
prepare for foreign competition.  But I don't see many benefits to
further delay."

Congress voted last year in favor of establishing "permanent normal
trade relations" with China, once it joins the WTO.  After joining,
China will gain the same low-tariff trade status that other major
U.S. trade partners enjoy, and its status will no longer be subject
to an annual congressional review of its human rights record.

China has been seeking entry into the WTO since 1986. It has signed
bilateral accession agreements with every WTO member except Mexico.
But negotiators must work out terms of a multilateral accession
accord needed before China's membership is complete.

Some Western trade experts worry that China's enthusiasm for joining
the WTO has ebbed steadily since signing the bilateral agreement with
the United States.  Global trade officials see the negotiations over
that deal as the biggest hurdle to China's membership and predict
that subsequent discussions with other nations would proceed with
little trouble.

Instead, even small issues have proved extraordinarily difficult to
resolve.  On agriculture, for example, Beijing has insisted that
China be designated a developing economy and thus permitted to
continue support payments to its farming sector.  But negotiators
from the United States and Western Europe have insisted that China --
which has replaced Japan as the nation with which the United States
has the largest trading deficit -- is too large and growing too fast
to deserve such lenient treatment.

Peasants account for about 900 million of China's 1.3 billion
population.  Terms of bilateral agreements signed with the United
States and the European Union require China to lower tariffs and
raise import quotas on staples such as wheat, corn and soy beans.

China's leaders consider maintaining a self-sufficient grain sector
to be a matter of national security. Western economists decry the
state's grain-buying program as inefficient.  Chinese farmers
complain the subsidies are too small to provide anything more than a
subsistence income.  Many farmers have already begun shifting to more
profitable crops and could benefit from expanded trade opportunities
under the WTO agreement.