By Adrian Croft
BRUSSELS (Reuters) - The 15 European Union governments gave initial backing Monday to an agreement hammered out by EU and Chinese negotiators on Beijing's bid to join the World Trade Organization (WTO).
EU foreign ministers meeting here welcomed the accord reached in Beijing last Friday, calling it a "major step" toward China fulfilling its long-held dream of joining the world trade body.
Ministers will not give their final decision until the complex pact has been studied in detail by EU trade experts.
The agreement "appeared to be a sound commercial package and to take full account of the EU's specific trade interests...," the ministers said in a statement after being briefed by EU Trade Commissioner Pascal Lamy, who negotiated the deal.
An EU source said ministers congratulated Lamy and, while some ministers said they wanted to study the agreement carefully, no serious reservations were expressed.
The EU-China agreement removed the last major obstacle to China joining the WTO. All WTO members have the right to negotiate with applicant countries on their trade concerns.
The United States, Japan and Canada have already reached agreement with China and only a handful of bilateral negotiations remain to be completed.
Lamy said China would have to make a huge number of changes to implement commitments made to the United States and the EU.
"It's going to be a revolution in order to get there," he told a news conference. "It is not going to be easy because the cultural and administrative changes which will have to take place are immense."
Implementation Is Key
Nevertheless, Lamy said China had committed itself publicly to comply with the pledges it had made to win WTO entry "which of course now is the real important question."
In some respects, the EU's agreement with China went further than a U.S.-China agreement hammered out last November.
Among the main concessions, China agreed to speed up the opening of its mobile telecommunications market, lift joint venture restrictions on large department stores and give seven licenses to European insurance companies.
EU sources said the bloc's bargaining power was enhanced because of this week's crucial congressional vote on normalizing U.S. trade relations with China. "Undoubtedly, in terms of leverage, the timing for us was ideal," one EU source said.
Some analysts believe the EU-China deal could influence the finely-balanced U.S. House of Representatives vote since Chinese concessions to the EU must also be granted to the United States.
Lamy said he thought the EU-China accord could "only be good news" for the United States.
Lamy conceded that he had not got everything he wanted from the agreement with China. For example, while China had made concessions on retail stores, it had retained a number of exceptions for books, newspapers, oil and fertilizers, he said.
Lamy said the seven licenses China has agreed to give to European insurers will be granted within three months.
On vehicles, Lamy said the EU had been unable to go beyond the U.S.-China agreement, under which Chinese import duties on cars will be lowered to 25 percent by 2006 from 80 to 100 percent at present.
But Lamy said he did gain three concessions important to European vehicle manufacturers, including lifting any joint venture requirements for engine production.
Car manufacturers in China would be free to choose for themselves which models they wanted to produce and the threshold for making investments without needing local government approval would also be sharply increased, Lamy said.:
