Talks between Chinese and World Trade Organization negotiators in Geneva appear to have stalled due to the inability to reach agreement on whether China will be accorded “developing nation” status for its agricultural sector, and the extent to which it will open its internal markets to insurance services.
The Chinese insist that with 900 million small farmers and 230 million people living in poverty, any subsidies they receive are “peanuts” compared to the amounts given to farmers in Europe, the U.S. and elsewhere in the western world.
Most countries with large agricultural sectors, including the U.S., Canada, Australia New Zealand and Brazil, oppose giving China the “developing nation” status, as they feel it would give Chinese exporters an unfair advantage.
Subsidies are limited to 5 percent in developed countries, vs. 10 percent in undeveloped ones. China at present subsidizes agriculture by only about 2 percent, but wants the freedom to raise subsidies if necessary to meet foreign competition.
Another complication reappeared when negotiators failed to conclude an agreement setting a timetable for China to further open its market to financial services, particularly insurance, and the lifting of geographical limitations on foreign insurers and brokers.
The next meeting between the two sides is scheduled to take place in China at the end of February or the beginning of March, but due to the present impasse China’s entry into the WTO will be further delayed.
A prolonged delay could damage the Chinese economy. An article on the Forbes website indicated that “foreign investments, trading partnerships, changes to the country’s financial system and a slew of reform would be delayed. Most of China’s economic forecasting and planning for the next couple of years have factored in WTO admission by the first half of 2001 at the latest.”|”impasse, in, geneva, between, china/wto
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