Reuters | By Paul Eckert
BEIJING - Clinking champagne glasses and smiling broadly, top trade officials of China and the European Union toasted a market opening deal Friday that removes the last major hurdle to China's membership of the WTO.
But EU negotiators led by Trade Commissioner Pascal Lamy failed to secure one of their most important goals of trumping a similar deal struck by the United States in the crucial area of telecommunications, an EU delegate said.
Instead, the Chinese side agreed to a generally faster timetable for market access than they offered the Americans. And they expanded the scope of business open to foreign companies in telecommunications and insurance.
The United States won 49 percent foreign ownership of telephone networks and 50 percent of value-added services, including Internet.
Lamy signed the agreement with Trade Minister Shi Guangsheng after a lunchtime meeting in Beijing's walled leadership compound with Premier Zhu Rongji.
The breakthrough after five days of talks was expected to give a boost to feverish efforts by President Clinton to sell to Congress the November deal his administration struck with China on entry to the World Trade Organization.
Congress is due to vote next week on whether to grant China Permanent Normal Trade Relations, which would give U.S. companies all the benefits of China's more open markets within the WTO.
"Equality, Friendship"
Chinese negotiators, accused by some powerful Beijing ministries of giving far too much away to the Americans, made plain they believed the U.S. deal was as far as they could go in terms of foreign ownership levels in telecoms and financial services.
At the signing ceremony, Shi said the deal embodied "the principle of equality, friendship and mutual benefit" between China and the EU.
Lamy said the deal "has benefits for China, it has benefits for EU companies and it will enhance China-EU relations."
"The European Union believes that WTO can provide a boost for the reform process, hence the extra special importance of this successful conclusion of our agreement," he said.
Premier Zhu has been pressing for WTO entry as a way to speed reform of ailing state enterprises through greater competition.
Chinese membership of the WTO will open its potentially vast market of 1.3 billion people much wider. Its entry is now a formality, with only a handful of countries - including Switzerland and Mexico - still to conclude bilateral agreements.
China Firm On Telecoms
The EU delegate, who declined to be identified, said China had not budged on issues of foreign equity ownership negotiated by the Americans.
"But that has been balanced by a broader range of concessions over a wider number of areas and accelerated staging," he told Reuters.
"In telecommunications, for example, the limit will remain where it has been under the U.S. agreement," he said.
"In areas where our industry is very competitive, there will be market access from day one instead of after a number of years and the limit will be reached a number of years earlier than was originally foreseen.
"In general there will be a two-year advancement of staging.
"Both in the telecommunications sector and in the insurance there is an added scope of business in the sense of certain sectors being covered that were not covered before," he said.
"The same applies to motor vehicles," he said. "In certain sub-sectors of motor vehicle production we have managed to get equity limits lifted."
The EU had been seeking 51 percent ownership of mobile networks.
Clinton is still trying to round up votes in Congress to approve permanent trade benefits for China.
The legislation is hotly opposed by many labor unions and some of Clinton's own Democrats who dislike China's human rights and labor records.Reuters:
