CHINA: WTO ACCESSION TALKS NEED POLITICAL PUSH

10:31 AM Mar 28, 1996

CHINA: WTO ACCESSION TALKS NEED POLITICAL PUSH
Geneva 27 March (Chakravarthi Raghavan) -- Chinese trade officials and negotiators will continue the technical talks for China's accession to the World Trade Organization, but the talks are getting bogged in bilateral commercial demands, and needs some political inputs, a senior Chinese negotiator said here.

The Chinese vice-minister, Long Yongtu, who is heading back this week to Beijing after about ten-days of talks here, said at a press briefing that while at technical levels, they would continue to work to satisfy their trading partners on their genuine concerns, bilateral disputes and commercial demands should not be brought up in the WTO talks and solutions to them made a precondition for the WTO accession.

"While we have the clear goal to join WTO, we are not in a rush to get in at the expense of our basic economic interests... and keeping China out will be bad for us and for the WTO and those keeping us out," Long said.

Another round of accession talks are expected to be held in September, but neither China nor some of its trading partners expect a quick winding-up of these talks. Long said that there was need for political inputs and decisions, but did not say whether China would be taking an initiative on this with the United States soon.

He however noted some forthcoming gatherings of trade ministers -- the APEC trade ministers meeting in New Zealand, and later in the year the WTO's first ministerial session in Singapore (after the US elections), and said "it is not excluded that there may be some high-level contacts and decisions."

Assessing the progress in the talks this time, Long said the accession talks had to be seen from the perspective of the nine-years of discussions that have been going on. Even by GATT standards it has been very prolonged and we are trying "to cumulate progress, no matter how small," he said.

"But to reach the final goal, these negotiations will need some important political decisions. It will be very difficult to judge whether a particular economy is qualified for WTO members. It is a subjective judgement."

Asked when such a political moment would come, Long said that it was very much up to the judgement of the major trading partners. "Every member is equal in the WTO, but those with more trade volumes have much more weight in the WTO and its decision-making. Whether we like it or not, that is a political reality," he said.

Long was however not willing to set a time-frame to complete the negotiations. He noted that some people advised China to set such a deadline and that without this the negotiations would not progress. Others felt that it would not be useful to put negotiators under pressure. China was in between these two opposing views and that was one reason why he was not setting a deadline.

"But as far as we are concerned, while we do want to join the WTO, we are not in a rush and cannot sacrifice our fundamental objectives for the accession.. One can of course expect that when China joins the WTO it will abide by the rules. For e.g. the WTO has rules in TRIMs -- relating to investments and local content requirements etc. But if someone wants to set China much higher standards, say on the entire range of investment questions which is not even in the WTO, then the negotiations will bog down."

Long noted that there were many countries participating in the talks, and each country had its own legitimate economic interests and objectives and it was "fair" to pursue them in the talks. But he hoped they would take a long-term, rather than a narrow immediate commercial view, in considering the terms for China's accession.

"China is a big power and a major economy. There is need for political wisdom and long-term vision to judge this matter," Long declared.

The major trading nations, and the WTO members, must seriously consider whether it was not in their best interest to get China into the WTO. But if one or two countries came to the conclusion that it is better to keep China out, this will be unfortunate. But it was for the majority of WTO members to find some solution.

During this round of the talks, the Chairman of the Working Party, Amb. Girard of Switzerland, had provided a list of 12 annexes to the protocol of accession and where China has to fill in the gaps. China would make every effort to fill them in and by September there will be another round of talks. China was not waiting for political decisions to continue with the technical work.

"But if there is no political decision," the Chinese assistant minister said, "we can be working for another one, two, three or even five years... The WTO is evolving and constantly engaged on new questions and issues. As time goes on, people will raise more and more questions, and there will be more and more requirements, and it will still not be the end of the story. But there is no conflict between our continuing to work at the technical level, while we wait for the right political moment..."

While China would try to meet the concerns of its partners, "if there is something demanded which is beyond our economy, it will become difficult for China."

Long said for example, the WTO accession talks were being used by the United States to raise the question of Chinese imports of US wheat, and the ban put on imports of wheat with a "TCK disease" (a fungus disease affecting apparently wheat grown in some seven states of the USA.

"China will remain a major importer of US wheat," Long said. "But pressure is being exerted on us to import this wheat from the seven states of the USA. This is a phytosanitary measure and something that has to be agreed to by scientists. But the US is asking us to import this wheat on the ground that it was politically important to them, and that if China did not agree, there will be a deadlock and no progress in the WTO talks.

"This is not fair and China cannot go on like this," Long declared.

On the complaint of US officials and industry that there is still rampant "piracy" in computer software and in CD discs, Long said that China was making its best efforts and had closed down many factories making CDs. The United States thinks this was not enough and China must do more.

This kind of demand, he said, is poisoning the WTO accession talks. They are implying if China can't implement a bilateral agreement properly, how could it be relied on to implement multilateral WTO rules.

However, between such large countries like the US and China there was bound to be enormous bilateral trade disputes, just as there are between the US and Japan or the US and EU. But if settlement of bilateral disputes is made a pre-condition, the accession talks would become an open-ended process and would become difficult. While he did recognise some inter-relationships, to make all this part of the accession talks, made it difficult.

Long said if China becomes a member of the WTO the central government would be able to set up a trade regime, to comply with the WTO rules, and this would help China to put an end to the "disorder" now prevalent in the foreign trade sector. At present, many enterprises and industries in China were taking advantage of the 'disorder' to make big profits and do not want any changes and "we want to become a member, and write our domestic regulations, to put an end to this."

If China were to be a member, the international community and foreign investors would have more confidence. The greatest disadvantage to outsiders, by China not being a member, lay in the fact that now China need not observe the WTO rules. If China is kept out it will cause great damage not only to China, but to the WTO and the international community.

Asked whether he envisaged a situation when China would lose interest in joining the WTO and, at that stage, it will not be China that might be knocking at WTO doors, but the WTO that would be knocking at Chinese doors, Long said: "Our goal is very clear, we want to be part of WTO. We have been isolated from the outside world for a long time and historical experience tells us that isolation will not bring development. There is a political consensus on this in China and hence our decision to open China to the outside world. We will continue that process. To enable China's integration into the world economy in a systematic way, we need to join the international organizations. That is our judgement.

"But if the WTO, for any reason, bows to the political pressure of some powers and keeps China out, we can still survive. But the damage will be not only to China but also to those who are trying to keep us out. It will be a serious blow to the WTO itself... But we cannot make the accession an open ended process."