By Paul Eckert
BEIJING (Reuters) - The European Union and China remained far apart in talks in Beijing aimed at hammering out a deal to bring China into the World Trade Organization, an EU source said on Tuesday.
"We are not within striking distance of a deal at the moment," the source said in Brussels at the end of a second day of negotiations. The two sides have agreed to meet for a third day.
"We have not made enough progress yet to mean we can see an end in sight," the source said.
An EU spokesman in Brussels was similarly downbeat, saying that not enough headway had been made in the first day for EU Trade Commissioner Pascal Lamy to travel to Beijing.
"Progress made on the first day was not sufficient for our negotiators to recommend Lamy get on a plane," spokesman Anthony Gooch said in the EU's first comment on the state of the talks.
Lamy has said he is ready to jump on a plane at short notice to go to China this week if good progress is made.
The EU source refused to say what the stumbling blocks were but added that Lamy would take a final decision on whether to travel based on the results of the third day of negotiations.
A European businessman familiar with the talks said insurance and telecommunications remained stumbling blocks to an agreement.
Talks on China's WTO entry have dragged on for 14 years, and with the end now in sight, analysts said they expected last-minute posturing and horse-trading.
India signed a deal with China on Tuesday, leaving 13 WTO members who have not reached pacts with Beijing. The EU's blessing is by far the biggest remaining obstacle to China's entry.
The talks between the EU, led by European Commission trade official Hans-Friedrich Beseler, and a Chinese team headed by Vice Foreign Trade Minister Long Yongtu ended on Tuesday with an agreement to meet again on Wednesday.
Long and Foreign Trade Minister Shi Guangsheng declined to comment on the China-EU talks on Tuesday.
Eu Imposes Silence On Talks
Before the remarks from Brussels, the EU had imposed a virtual news blackout on the negotiations. EU diplomats in Beijing were warned against talking to reporters after their daily briefings by the negotiators -- reflecting the delicate task of representing the diverse interests of 15 member states.
One European diplomat said the EU's secrecy was designed to avoid the fate of the United States, which embarrassed and angered China last April by publishing details of Chinese concessions, many of which Beijing disputed.
EU officials say November's Sino-U.S. trade pact, a breakthrough in China's WTO bid, met 80 percent of EU concerns. But Brussels is keen to show it is not a pushover now that China has a deal with the United States, its biggest trading partner.
Keen Interest In United States
The EU talks are being watched closely in Washington, which clinched its market-opening pact with China in November.
U.S. officials are keen to see China conclude agreements with the EU and several other countries so they can send the deal to Congress quickly for a vote on Beijing's trade status, wary of a surge in anti-China sentiment as a presidential election nears.
U.S. labor unions have launched a major campaign to shoot down China's entry, citing what they say is Beijing's poor record on human rights and labor issues.
China gave new ammunition to its U.S. foes on Monday, warning Taiwan that it could face a military invasion if it stalls on talks aimed at ending their half-century political estrangement.
Stakes High
Premier Zhu Rongji and President Jiang Zemin have personal stakes in ensuring China's early membership, having pushed for it in the face of bitter opposition from conservatives.
The Europeans were expected to press China to top some of the concessions made to the Americans in telecommunications and financial services, according to sources close to the talks.
In particular, the EU wants more licenses for European insurers. China has granted business licenses to just 14 foreign insurers, including five U.S. firms and five European ones, but some U.S. firms hold more than one license.
They also have specific European issues to negotiate, such as access for British gin and Scotch whisky, French cosmetics and cheese and Italian leather goods.
India's deal with China, signed by Shi and Indian Commerce and Industry Minister Murasoli Maran, ends five years of talks.
India is only a minor trading partner but was among key emerging economies that needed to complete a bilateral trade accord with China. An Indian official said the deal would help double bilateral trade in the next three years.
China must reach agreements with all WTO members who request talks before it can join the body that sets global trade rules.
The United States, Japan, Australia and Canada all reached separate agreements with Beijing last year. Key emerging economies like Argentina, Thailand, Mexico, and Malaysia are among the 13 WTO members yet to complete accords with China.:
