By Associated Press
November 15, 1999
Beijing - After 13 years of fitful talks and six days of grueling bargaining, Chinese and U.S. negotiators signed a breakthrough agreement on Monday that removes trade barriers and clears the biggest hurdle to China's entry into the World Trade Organization. The agreement obligates China to cut tariffs an average of 23 percent and promises greater access to the relatively closed Chinese market for U.S. banks, insurers, telecommunications firms and Hollywood film exporters, according to a statement released by the U.S. Embassy. To get into WTO, China still needs to negotiate separate access agreements with other key trading partners, the European Union foremost among them.
U.S. Trade Representative Charlene Barshefsky and China's foreign trade minister, Shi Guangsheng, signed the agreement. They then shook hands and were joined in a champagne toast by President Clinton's special economics adviser, Gene Sperling, and Long Yongtu, China's lead WTO negotiator. In Ankara, Turkey, President Clinton said the agreement was ``a profoundly important step'' in relations between Washington and Beijing and a boon for the global economy. China's admission to the WTO has been a major foreign policy and economic goal of the Clinton administration. Shi called it a ``win-win'' deal that was ``mutually satisfactory for both countries.'' ``We are looking forward to the day of becoming a full member of the WTO, within the year,'' Shi said. The deal sent stock prices in Hong Kong soaring to their highest level in more than two years.
The U.S. Embassy said China will eliminate export subsidies, double the number of foreign films it allows in each year to 20 and allow American firms to finance car purchases. With the deal, China will also put into effect an April deal that will slash tariffs on agricultural goods and provide larger import quotas for wheat, corn, rice and cotton. It was unclear whether the agreement went beyond concessions Premier Zhu Rongji made in April and that Clinton rejected. Barshefsky's office published a list of those concessions, allowing Chinese opponents of WTO to lobby the Chinese leaders to back down. Anti-U.S. sentiment ignited by NATO's bombing of the Chinese Embassy in Yugoslavia in May made accommodating Washington politically dangerous.
In April, Washington had pressed for foreign majority ownership in telecommunications and an end to barriers for U.S. financial firms. It also asked China to agree to quotas on textile exports for five years, a demand China rejected. Time has been pressing for agreements on China's entry to WTO. At month's end, WTO members will discuss launching new global trade liberalization talks, and China wants to be part of those talks. There has been concern that once trade ministers start negotiating new trade liberalization measures they would be too busy to take up Beijing's entry for several years.
Speaking after the signing today, trade officials said the agreement has come too late to make Beijing a full-fledged member before the WTO meeting later this month. Unless rules are bent, there is too little time to complete the procedure for entry before the four-day meeting in Seattle, beginning Nov. 30, an official told The Associated Press in Geneva. "The chances are China will not officially be a member by the time Seattle is finished,'' the official said on condition of anonymity. ``On the other hand, if both the U.S. and the Europeans announced that they have concluded their own negotiations, this will be a major, major boost.'. Even if China has not completed the entry procedure, it could still be invited to take part in the talks, the official said. The decision on China's membership has to accepted by all 135 WTO member countries, but observers say agreements with the United States and the EU would likely clear the way for agreements with the other nations.
U.S. businesses in China expressed immediate delight at news of a deal and predicted that U.S. companies would invest more once China is bound by the WTO's trade rules. The deal would lead to increased trade that will benefit both countries, they added. ``Implementation of WTO standards will reduce many of the distribution and regulatory hardships that U.S. businesses now face in China,'' said John Sullivan, vice chairman of the American Chamber of Commerce in China. ``That means more growth potential for American companies and creation of more jobs back home.'.
WTO membership will give foreign businesses a framework for dealing with unfair treatment, but tariffs on imports will still remain, added Michael Furst, executive director of the AmCham office. ``I'm confident that China will make continued progress in terms of opening up to the outside world and becoming more like the rest of the world in the way it functions -- but it's not going to be an overnight thing just because we have a WTO deal,'' Furst said.
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