AIG Issues Statement on China WTO Accession Process

American International Group, Inc. (AIG) has issued the following statement regarding the negotiations concerning China’s accession to the World Trade Organization (WTO):

“No company has been a stronger advocate of China’s accession to the WTO or for that matter has worked harder than AIG for over 25 years to open the Chinese insurance marketplace for everyone. Since 1975, when AIG first established a dialogue with the Chinese on insurance, AIG has stood for market access for all companies and the expansion of China’s insurance marketplace for the benefit of the Chinese people. Since 1992, AIG has worked to build its insurance business in China, bringing technology, jobs, new products and distribution methods to the Chinese insurance industry. Nonetheless, we still have only a modest share of the total insurance market in China.

“When the U.S. and Chinese governments reached agreement in 1999 on the details of China’s WTO accession, the negotiators agreed to ‘grandfather’ all existing rights acquired by foreign services companies upon China’s accession. The maintenance of acquired rights for foreign investors is a fundamental trade policy principle, well established in the United States and other countries.

“The office of the U.S. Trade Representative (USTR) has worked diligently to open markets and resist attempts to turn back hard-won advances in foreign markets. The question of whether AIG would be allowed to continue to expand its branch operations on a wholly owned basis in China was never an issue in the negotiations until the European Union attempted, in its negotiations with China, to limit such expansion. In fact, several European-based insurance companies have themselves been grandfathered for aspects of their operations in China, yet they argue that only AIG is being benefited by the grandfathering provisions.

“These trade initiatives are about opening markets, not turning back the clock. AIG has every confidence that the Bush Administration will ensure that the important principle of safeguarding acquired rights is preserved in China’s final WTO accession agreement.”