EU/China To Hold New Talks on WTO Membership

May 15, 2000

Following the failure to reach an agreement last March between the European Community and China over membership in the World Trade Organization, both sides continued to characterize the existing gaps between their positions as bridgeable, and the talks as constructive and hopeful.

Chief EU negotiator, Pascal Lamy, returned to Brussels to seek the consensus of European Ministers for a broader mandate, and for possible compromises.

This week Lamy returns to Beijing to meet with Chinese Foreign Trade Minister Shi Guangsheng to once again try to negotiate a deal between the EU and China, which would lead to an agreement, resolving the remaining issues not covered by the U.S. accords with China reached last November.

At the heart of the impasse are the percentage of ownership in the telecommunications and insurance sector, and tariffs on farm products. China has so far refused to go beyond the terms of the agreement with the U.S. and to accede to European demands that EU companies be allowed to acquire majority interests.

There may never be a more propitious time for an agreement, as the vote in the U.S. Congress on PNTR status for China looms in a week, and is deemed extremely close. If an agreement with Europe were reached, it would put added pressure on House legislators to approve the U.S. deal, thus the Chinese have an additional incentive to to reach a compromise. If they accept EU demands, U.S. companies would be granted equal privileges under WTO rules.

Lamy told the BBC that he was neither optimistic nor pessimistic, but felt that a compromise deal was possible. He intends to begin talks immediately upon his arrival.

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