After 13 years of fitful talks and six days of grueling bargaining, Chinese and US negotiators signed a breakthrough agreement yesterday that removes trade barriers and clears the biggest hurdle to China's entry into the World Trade Organization.
The agreement obligates China to cut tariffs an average 23 percent and promises greater access to the relatively closed Chinese market for US banks, insurers, telecommunications firms and Hollywood film exporters, according to a statement released by the US Embassy.
US Trade Representative Charlene Barshefsky and China's foreign trade minister Shi Guang-sheng signed the agreement. They then shook hands and were joined in a champagne toast by US President Bill Clinton's special economics adviser, Gene Sperling, and Long Yongtu, China's lead WTO negotiator.
PHOTO: AP
Barshefsky then went to the Communist Party leadership compound, Zhongnanhai, and met Chinese President Jiang Zemin.
In Ankara, Turkey, US President Bill Clinton said the agreement was ``a profoundly important step'' in relations between Washington and Beijing and a boon for the global economy. China's admission to the WTO has been a major foreign policy and economic goal of the Clinton administration.
``This is a profound and historic moment in US-China relations,'' Barshefsky said after signing the agreement. She and Shi agreed that it would, in her words, ``help serve as an anchor'' to often rocky relations.
China's Shi called it a ``win-win'' deal that was ``mutually satisfactory for both countries.''
``We are looking forward to the day of becoming a full member of the WTO, within the year,'' Shi said.
The deal sent stock prices in Hong Kong soaring to their highest level in more than two years.
Not everyone was quite so upbeat, however, as diplomats and trade sources told Reuters that they felt China still has some way to go before gaining entry to the WTO.
"It would take a miracle for them to be in this year, let alone in time for Seattle," said one envoy close to the talks.
To get into WTO, China still needs to negotiate separate access agreements with other key trading partners, the European Union foremost among them.
EU ministers welcomed yesterday's deal, saying the move was an "important step" in Beijing's 13-year-old drive to join the global trade body. But, "in order for China to enter the WTO, agreements with the EU and Canada will also have to be finalized," European Commission Trade Spokesman Anthony Gooch reminded reporters.
Although details of the agreement were sketchy, the US Embassy said China will eliminate export subsidies, double the number of foreign films it allows in each year to 20 and allow US firms to finance car purchases. With the deal, China will also put into effect an April deal that will slash tariffs on agricultural goods and provide larger import quotas for wheat, corn, rice and cotton.
It was unclear whether the agreement went beyond concessions Premier Zhu Rongji made in April and that Clinton rejected. Barshefsky's office published a list of those concessions, allowing Chinese opponents of WTO to lobby the Chinese leaders to back down. Anti-US sentiment ignited by NATO's bombing of the Chinese Embassy in Yugoslavia in May made accommodating Washington politically dangerous.
``I applaud President Clinton, President Jiang and Premier Zhu for putting the long-term interests of the US and China over short-term political expediency, and putting a 21st century vision of a freer world economy over old outdated 20th century visions,'' Clinton adviser Sperling said, acknowledging the political difficulties.
Time has been pressing for agreements on China's entry to WTO because at month's end WTO members will discuss launching new global trade liberalization talks.
There has been concern that once trade ministers start negotiating new trade liberalization measures they would be too busy to take up Beijing's entry for several years.
US businesses in China expressed immediate delight at news of a deal and predicted that US companies would invest more once China is bound by the WTO's trade rules. The deal would lead to increased trade that will benefit both countries, they added.
``Implementation of WTO standards will reduce many of the distribution and regulatory hardships that US businesses now face in China,'' said John Sullivan, vice chairman of the American Chamber of Commerce in China.
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