New York Times | By CRAIG S. SMITH
SHANGHAI, June 9 - American and Chinese trade negotiators said today that they had resolved most of the remaining issues that have held up China's entry to the World Trade Organization, including the degree to which China can subsidize its farmers as a member of the trade group.
The agreement has revived hopes that China can join the global trade club within months and take part in rule-setting negotiations by the group's members that could start late this year.
"This is a breakthrough agreement with benefits for American farmers, American exporters and U.S. companies doing business with China," said the United States trade representative, Robert Zoellick, in a telephone interview from Washington after arriving there from negotiations in Shanghai. "It moves China toward W.T.O. membership this year and further along the path of economic reform and the rule of law."
China's state media quoted Trade Minister Shi Guangsheng as saying the two sides had "reached full consensus" on the outstanding issues at meetings that followed a conference of regional trade ministers here. The final agreement came during talks between Mr. Zoellick and Mr. Shi that began late Friday night and lasted until 3 a.m. today. Mr. Shi then took the agreement to China's president, Jiang Zemin, who was visiting Suzhou, near Shanghai.
China has been working for more than a decade to join the organization, which regulates trade among its members. It has signed bilateral agreements with all key members, except Mexico, which expects to conclude negotiations soon and promised not to block China's entry.
But efforts to draft a document stating the terms of China's membership foundered early this year on differences between the United States and China over the degree to which China will be allowed to use subsidies to support its farmers.
China is already facing an economic crisis in the countryside, where its vast rural population is being squeezed between rising costs and falling prices for crops. It wants to retain as much flexibility as possible in subsidizing that population, an important mechanism in keeping rural unrest in check.
The United States, meanwhile, worries that subsidized farm produce from China could undercut American farmers, who are already under pressure from imports.
As part of an overall agreement on the use agricultural subsidies, China had wanted the freedom to offer its farmers subsidies worth up to 10 percent of the value of their output, the level set by the trade organization for developing economies. The United States wanted to limit that to a maximum of 5 percent, the same restriction it operates under as a developed economy.
Neither the United States nor China released details of the agreement today, but senior American officials said the final agreement gives China some of the flexibility it wanted on some farm products while setting tighter limits on the subsidies on others.
With the issue settled, efforts to draft the necessary comprehensive document are expected to make swift progress at the 16th session of the trade organization's working group on China's membership, which will begin June 28 in Geneva.
The United States and other members are pushing for the organization to begin a new round of negotiations to set rules for the group later this year. They would like those talks to begin when the group meets in November in Doha, the capital of the Persian Gulf state of Qatar.New York Times:
