China's accession to full membership in the WTO is, by no means, a foregoneconclusion. As a first step, the US administration will have to try to sellthe agreement to the American public, American business and lobbies andfinally to the US congress. While the Congress does not have the power tostop China's membership into the WTO, it can prevent these rules beingapplied to US-China trade. So, the Clinton-administration will have toconvince Congress to amend the provisions of the Jackson Vanik legislation,which currently prevents the US from granting China permanent `most-favourednation' (MFN) status. Even if the Americans agree to everything, China willhave to go out and negotiate on the conditions for accession to the WTO withthe EU, Japan and India among others. Each of these countries and tradingblocks will have to agree and approve of the terms for China's entry to theWTO. Europe, for example, will have different requirements from theAmericans for allowing the Chinese in. They may want bigger tariffconcessions on certain products, where they export more than the Americansto China. What this means is that, China may have to brace itself to givemore concessions.

In practice though, you might expect China to count on WTO membership oncethey have convinced the Americans to agree. This is because the UnitedStates trades far more with China, and in a much larger number of products,than Europe or any of the others. Under the WTO's MFN rules, the best termsnegotiated by any country with China will have to be applied to trade withall other WTO member states. Since the Americans are far more likely thanany one else to obtain favourable terms from China, in practice America'sterms are likely to prove sufficient on most goods for most countries.

And besides, it is in everyone's interests that China joins the WTO. Chinais probably the fifth or sixth biggest export market for US goods. Thismarket, has grown at an average 15 per cent over the last decade, whichmakes it a very valuable prospect for the Americans, the Europeans andwhoever else may care to trade with China. Adding to the lure of China'smarket is the fact that most of China's imports are in high value addedareas, where the average wages are higher. This makes it easier politicallyto sell trade with China.

The Institute for International Economics in Washington DC estimates thatthe static gains alone, from trade, by China joining the WTO might mean anincrease in world exports to China by around $21 billion. US exports toChina might increase by at least $3 billion annually. This is the veryminimum expected. Other estimates, factoring in the dynamic effects ofincreased trade, perhaps from increased competition, claim the US alone maybe able to increase exports to China by between $10 billion to $15 billionannually. Even Taiwan, which probably has the most to fear from theascendancy of China, will cheer China's membership to the WTO. For onething, the way is clear for them to be inducted into the WTO now. This far,the Chinese had insisted that Taiwan not be let in, till they themselveswere. Taiwan has already met all its obligations for membership in the WTO.

Once China is allowed in, it may only be a matter of time before Taiwan istoo. But what really makes China so valuable to developing countries in theWTO is that it is, in spite of being the worlds third largest economy, stilla poor country. Average incomes in China still average less than $1,000.

Even more importantly China is rich in labour, precisely as we are, and poorlike we are in capital resources. China has a comparative advantage inbroadly the same areas we do. This means our interests are likely to be verysimilar in Trade negotiations. China's market might prove an invaluablebargaining chip in such trade talks.

Take for example, the issue of labour, or environmental standards. The EUand the United States can afford to bring such spurious (because the WTO isnot the appropriate forum to discuss such issues) topics to the negotiationsprecisely because developing countries, even countries like India, have moreto gain from trade than the advanced economies. The situation becomes verydifferent when you have China and India in the same corner and articulatingthe same interests. There is, all of a sudden, much more to gain for theAmericans or the Europeans by conceding a few concessions to developingnations. China, therefore, would strengthen the `less developed countries'bargaining interests at WTO discussions like no other nation in the world.

It is in this context that developing countries should see China'smembership in the WTO as very much in their best interests.