6:52 AM Mar 22, 1996

WTO CHINA WORKING PARTY MARKING TIME

Geneva 22 Mar (Chakravarthi Raghavan) -- The Working Party on China's accession to the World Trade Organization ended its first meeting (under the WTO), without any sign that a successful conclusion of the more than a decade-old talks this year, and perhaps some indication that like many other things, this too will be put on the back-burner in the American election year.

No date has been set for the next meeting of the working party, and its further work is to be planned after July, by when China as well as other WTO members have been asked to table their revised proposals for various annexes to the protocol of accession, while China and its trading partners would continue their bilaterals.

In what was clearly interpreted as a reference to the US presidential year politics and the injection of the Chinese issue there, the Chinese Assistant Minister Long Yongtu, after explaining the various steps China was taking, told the working party Friday, "we hold that the top priority at this date for China's accession is to keep political interference of all kinds out of this process and put the accession negotiation back into the normal track of international economic and trade negotiations."

The Chinese ambassador to the UN is reported to have told a small group of journalists earlier this week that he did not expect much progress before the US elections this November.

While China has been negotiating the terms of its 'resumption of status' as a GATT Contracting Party since more than a decade, the negotiations now involve its terms of accession to the WTO involving all the areas of that agreement -- goods, services and intellectual property. This is the first meeting of the WTO Working Party.

While the Chinese delegation will be in Geneva next week too, Mr. Long told journalists that no meeting for bilateral talks with the US has been set here so far. While the dates of their presence in Geneva had been communicated to the US, they had not so far received any response about a date for talks, he added.

As indicated by it at the APEC summit, and in bilateral and other talks, China has now circulated a detailed list of its proposed tariff reductions on some 4996 items, and this has been circulated to the working party.

Long explained that the implementation of these reductions would begin on 1 April 1996, and would represent a 35% reduction of the single average rate from 35.3% to 23% -- with tariffs for industrial products to be brought down from 34.5 to 21.5 percent (or a 37.7% cut) and that on agricultural products from 40.3% to 32.5%) or a 20% cut). With this, Long said, China would have met its commitment in 1994 to reduce its tariff levels from 23% to 18.6% within five to ten years.

Long noted that all members of the WTO had admitted that the inclusion of China, a highly dynamic economy and with enormous potential, would contribute significantly to the strengthening of the multilateral trading system. China also understood that its integration into the system should be based on its commitments to observe the rules of the GATT and WTO and gradual liberalisation of its markets.

Explaining the concessions it has made and outlined in the course of these long negotiations, including during its participation in the Uruguay Round and the schedules it filed at Marrakesh, Long asserted that with all these China had met the basic conditions for membership.

"But regrettably, due to reasons known to all, China still has not acceded to the WTO, and therefore is not legally bound to implement the Uruguay Round Agreement," Long said. "Ironically, those who have loudly accused China for not willing to undertake the obligations for international rules are exactly those who have tried to deprive China of its right to implement the Uruguay Round Agreements. Because they have delayed the process of China's accession to WTO and consequently have caused damages to the universality and fairness of the multilateral trading system as well as the practical economic interests of the WTO members.

"It is fair to say that keeping China out of WTO is unwise and will end up by damaging their own interests. We believe no force in this world can stop China from developing economic and trade relations with other countries on the basis of equality and mutual benefit."

While thus striking a cautionary note that if China is not admitted and allowed to enjoy the benefits of WTO membership, it was also not bound to observe the obligations, the Long statement echoes the views of many observers outside that without a proper balance, a China inside the system may be difficult, but one outside may be even more difficult for everyone, both China and others.

The Chairman of the Working Party in a summing up, outlined the progress made so far (in the GATT negotiations in drawing up various annexes (including those setting out the products subject to state trading in China and those subject to price controls), as well as China's schedules covering market access in goods and services. The substantive focus of negotiations over the coming months, he suggested, should be on the substantive content of these annexes. He would also hold talks with delegations in informal sessions to focus on more specific subject areas. On the basis of these, and the clarifications China gives to the questions put to it, he would draw up consolidated paper on the draft protocol and be able to plan further work.