China before Doha

US and EU close in on WTO deal with China

The speed at which the United States (US) and the European Union (EU) are finally trying to resolve their differences with China on the latter’s bid for membership to the World Trade Organisation (WTO) suggests that China may in fact make it to the WTO by the time the trade ministers meet at Doha, Qatar in early November 2001. Last week the US trade representative, Mr Robert Zoellick met Chinese trade officials in Beijing and towards the end of June European Commission officials are scheduled to hold consultations with the Chinese in Brussels. It appears that both the US and the EU are ready to strike a deal with China. The consultations with EU are ‘bilateral’ only in theory since individual member-states are conducting parallel ‘bilaterals’ with China and would like to be satisfied with the outcome before giving their green signal to a EU-wide agreement. Once these bilateral deals are struck, and India has already tied up its agreement with China, the action moves to Geneva where the WTO working group on China’s membership is scheduled to meet in the first week of July.

If all goes well, and there could be many a slip between the cup and the lip, China may well be attending the Doha ministerial meeting in November. The hurdles can be both on the external negotiating front and on the domestic front in China. Anti-WTO voices have begun to surface once again in China. This time an official report of the Chinese communist party has warned of dire consequences for China’s industry and working class if China were to stick to the promises it has made to secure WTO membership. The anti-WTO voices in China could be pressure tactics to hold back US and EU pressure on extracting more concessions out of China. If, however, these represent last minute internal resistance then it remains to be seen how the government in Beijing will resolve them. China has emerged as a huge market with imports into China estimated to hit $ 1.4 trillion by 2005. China’s share of world trade has increased four-fold in the last two decades, now close to 4 per cent. While China and its trading partners will gain from China’s entry into the WTO, it should also be remembered that China’s commitment to fast-paced tariff reduction will only add to the pressure on India to follow suit.