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TWO MORE SESSIONS PLANNED ON CHINA WORKING PARTY

by Chakravarthi Raghavan

Geneva, 23 June 2000 -- After a week of informal sessions to draft the protocol and the draft annexes for China's accession to the WTO, and a formal meeting, the Working Party on China is to meet again in the second half of July, with another session in September.

"I am rather optimistic about the possibility of reaching an agreement within a reasonable period of time," Chairman of the Working Party, Pierre-Louis Giraud of Switzerland told a news conference Friday.

For his part, the Chinese Vice Minister Long Yongtu said, "the Working Party and its members have shown a spirit of cooperation and the discussions have been positive, but the timing of China's entry depends very much on the working party."

"After 14 years of negotiations, I do not want to make any guesses," he added.

Some trade officials said the process is proving more time-consuming and difficult, and an entry date for China early in next year seemed a more likely scenario.

Giraud said that some of the Annexes to the protocol would require further substantive revisions, while others were close to finalization.

This has been the first time after a long period that the working party has had an in-depth discussion on the draft protocol and the report of the working party. But the task of drafting the protocol appears to have been complicated by the approach taken in trying to draft provisions based on the agreements with the US and the EC and 'multilateralising' the special provisions.

Normally, in all accessions, there are standard provisions. And each country's particular situations (in terms of its trade regime) is reflected in terms of derogations or transition periods etc.

An approach that was at one stage suggested to the Chinese by some of their experts and friends was 'to grandfather' some of the special arrangements and provisions, and provide for their phase-out in an agreed time-frame. But this did not prevail - it is not clear whether it was due to the Chinese themselves or their major trading partners.

But with the kind of bilaterals that China has had to agree to with the United States and the EC, and the need to multilateralise these, the drafting exercise itself has become quite complicated. Giraud at the informals called for a "pragmatic approach."

Giraud told the news conference that China has had discussions and reached agreements with the US and the EC on some provisions. At the working party some concerns had been expressed about the multilateral character of these provisions and "we will take care of it."

Long told the Working Party Friday that a few members had raised "some unreasonable requests - either requesting China to undertake obligations exceeding WTO rules, or insisting that China cannot enjoy the rights under WTO rules."

"I am deeply concerned with such requests," Long said.

There have also been reports of new demands and new requests on China from some who had earlier concluded their bilaterals. But Long would not amplify.

There have been reports that some of the requests involve demands for a general catch-all special safeguards provision to apply only to imports from China and a completely separate method to deal with any balance-of-payments questions relating to China.

While confirming that there had been such 'unreasonable demands' on it, Mr Long refused to identify the countries concerned.

Said Mr. Long: "The balance between rights and obligations is the fundamental principle of China's WTO accession. The WTO is a rule-based multilateral trade organization, and China is willing to abide by WTO rules while enjoying its rights as a WTO Member. There shall be no dual standards with respect to the relations between rights and obligations.

We will never accept a further request that China should undertake obligations exceeding those for ordinary WTO Members, nor will we allow the rights that we should enjoy to be impaired or even deprived of. If WTO members expect China to fully honour its commitments, they must respect China's rights. When China is able to enjoy all the normal rights as a WTO member, China will effectively enforce its commitment under the WTO agreement and protocol."

Giraud told the working party in a concluding statement, that was made available to the media, that the working party had considered many difficult protocol issues, including texts developed bilaterally between China and a number of working party members. A number of new proposals had been made, particularly in regard to several open issues.

He confirmed that in respect of the draft Report, Protocol and annexes, specific information requests had been made of China, and wanted the working party members seeking such information to put in their requests in writing so that China could respond by 7 July.

These and other inputs would be reflected in a new draft Report to be given to members before the next meeting, in the second half of July, and most probably again in September.

A trade observer closely following these talks said that if care is not taken, the one claim of the WTO over the old GATT, namely that it has ended the various 'grey area' measures of bilateral accords, would be belied.

China is still in the process of completing bilateral market access negotiations with Mexico, Switzerland, Guatemala and Ecuador. It was announced Friday that negotiations have been completed with Costa Rica. - SUNS 4694

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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