WTO entry stalls over trade stand by Europe - International Pages - Brief Article

Business Asia, April 14, 2000

China's resistance to making more concessions to Europe is a key reason for the failure of high-level talks on China's bid to join the World Trade Organisation (WTO), analysts say.

The latest round of market-opening talks between China and the European Union ended in Beijing this month without agreement, dashing hopes raised by the personal intervention for the first time of the EU's Trade Commissioner Pascal Lamy.

The EU said progress was made in the four-day session but no date was set for the next round.

The failure is a setback to China's hopes of joining the WTO this year, which would be the achievement of a 14-year-old ambition.

"The obvious reason for me seems to be that the Chinese are playing poker with the idea they don't want to give more than they gave the Americans," said Hanns Glatz, board delegate for European affairs at car giant DaimlerChrysler.

"They feel if the Americans are satisfied, that is it," he said.

When the United States reached a bilateral deal with the Chinese after arduous negotiations last November, China was seen as having overcome the main hurdle to membership of the WTO.

But the 15-nation EU, the world's largest exporter and the number one investor in China, has made clear it will be no pushover. It has said the US-China deal covers 80 per cent of its interests, but that it needs more concessions from China on the other 20 per cent of specific European priorities.

"The Chinese probably thought they had gone as far as they needed to go in getting a deal with the US. There is a little bit of reticence to go further," said Paul Brenton, trade economist at the Centre for European Policy Studies, a Brussels thinktank.

There may also be an element of the EU trying to exert influence on the trade policy stage and showing that it would not just follow the US lead, he said.

The EU is the most important of 10 WTO members which have yet to reach agreements with China if it is to join.

Any concessions that China made would be granted not only to the EU but to all of the WTO's 135 members.

China's chief WTO negotiator Long Yongtu suggested in Geneva this month that Beijing was very unlikely to give more to the EU than it had to the US.