12:22 PM Mar 3, 1997

CHINA ACCESSION TALKS THIS WEEK

Geneva 28 Feb (TWN) -- Talks on Taiwan's accession to the WTO were resumed this week at the working party, which held its first meeting since WTO's entry into force.

In starting the accession talks on Taiwan, under the old GATT, the Contracting Parties decided that the Taiwanese accession decision can come only after China has become a member - and this political decision still continues, though few mention it.

The Chinese accession talks (which began in 1986, just before the launching of the Punta del Este Uruguay Round negotiations) are themselves due to be resumed next week.

There is renewed talk, that the negotiations will be clinched this year and China would become a member. and that China will make some major concessions to the United States and Europe.

The WTO head is due to visit China in mid-March, when the accession issue will be discussed.

Beijing has been holding bilateral talks with Washington and Brussels, and the general expectation is that an accord would be reached on this issue, between US and China, which could be formally announced during the visit to China of President Clinton this year.

But if the talks for some reason or other (including US domestic politics) are not quickly clinched, there will be an anomalous situation in that Hong Kong, which would revert to China in July, would continue to be a WTO member as a 'separate customs territory' of China, while China itself would not be.

It would create not only a very anomalous situation, politically, but in trade and economic terms, and problems for other trading partners.

The WTO agreement provided that all the contracting parties of the old GATT would be members of the WTO (thus making Hong Kong and Macau, WTO members, as separate customs territories respectively of Britain and Portugal).

But it will be a new ball game in July - and Hong Kong would continue to be a member as a separate customs territory, but politically part of China.

The General Agreement of 1947 (carried over into the WTO as GATT 1994) envisaged separate membership for a portion of a territory of a member, which is administered as a separate customs territory, but not the other way round.

In the working party on accession of Taiwan (the Taiwan province of China, and a separate customs territory), the major trading nations spoke of the progress in the bilateral market access talks, but sought reduction of barriers in agriculture, telecom and financial services sectors.

Taiwan, it was mentioned at the working party, has completed bilateral talks with some eight countries (including Australia, Japan and South Korea), but its talks are still continuing with US, Canada and the EC.

The US is seeking further liberalisation by Taiwan of market access for agriculture, as well as in sectors like telecom, automobile (where the US is seeking equal treatment with the EC).

Taiwan has said it will be ending its state monopoly on the tobacco and liquor sectors.