5:23 AM Jun 29, 1994


Geneva 28 June (Chakravarthi Raghavan) -- The GATT working party on China's resumption of status in the General Agreement resumed its work on Tuesday -- with China pressing for accelerated work to enable it to join the World Trade Organization as a original member and some of the industrialized countries privately expressing doubts whether it could be accomplished.

Chinese vice-Minister Gu Yongjiang told the working party that the issue of China's joining the WTO as an original member of the WTO was "of vital importance to our country" and to the WTO itself and towards this China was ready to consult at any level and anywhere with any of the contracting parties.

The negotiations of China for resumption of its status has been going on for eight years, but it is only recently that the talks are trying to come to grips with the problems.

China pressed at the meeting for setting a time-table to complete work on the protocol, as well as related bilateral and other discussions and negotiations, to enable the work to be completed well in time before the end of the year.

One of the points and issues relates to China's view that as a developing country, it should get the same transition period as other developing country contracting parties under the provisions of the WTO and its annexed agreements.

The United States and the EU are reported to have some reservations. The two also have differences on the kind of conditions that should be put on China for its entry, including any special safeguard measures until China's full transformation into a 'market economy'.

The discussions in the working party this week are also expected to focus on the "Foreign Trade Law" enacted by the Chinese National People's Congress in May. Both in the informal consultations and at the formal meeting, China was asked to give some detailed clarifications on the provisions of this law and the regulations to go with it.

A major emphasis on the part of the US, EU and others was on the transparency of the regime and its administration and compliance with the obligations in GATT and the WTO.

While the recent decision of US President Bill Clinton in delinking the human rights issues in China from the MFN treatment for Chinese exports to the US have removed political roadblocks, there are still some major questions relating to the Chinese trade regime, and the speed with which China could bring its regime in line with the GATT/WTO obligations, the transition provisions that several of China's trading partners want until a market-based economy and trade system is functioning internally.

The meeting of the working party, under the chairmanship of former Swiss Ambassador to the GATT, Pierre-louis Girard, was preceded Monday by informal consultations. Girard has also prepared a socalled 'non-paper' containing "elements" suggested by various contracting parties on the kind of provisions they would like to see in the protocol to be drawn up.

While Girard's original intention had been to draw up a draft protocol, as a basis for discussion and further work, incorporating the various suggestions that he had asked cps to put forward at the last meeting, he would appear now to have merely provided a "non-paper".

Speaking at the working party Tuesday, the Chinese vice-minister Gu Yongjiang noted that the 'non-paper' contained requests from all cps, and China would try to provide its views, and its limits of acceptance of some of the provisions suggested.

Gu hoped that the discussions this week would enable a consensus to be reached on some of the main issues so that a formal document on the China protocol could be prepared and the process could move forward.

The Foreign Trade Law, Gu said, would placed China's foreign trade under the rule of law and would result in transparency and stability and enable promotion of trade between China and its trading partners.

On the issue of market access, he said, since June 1994, China had eliminated over 200 non-tariff measures (NTMs) governing imports. The GATT secretariat had also been provided with non-tariff measure administration lists. Some of the existing NTMs further reduced during the negotiations with the cps.

As for its schedules of concessions in agriculture and services, China would take into account views of cps and make suitable modifications or make improvements.

China was one of the non-GATT cps, participating in the Uruguay Round, which signed the Marrakesh Final Act and has annexed its schedules. These are however subject to further negotiations, verification and acceptance as part of the accession process.

Gu noted that the talks on Chinese resumption of status has been going on for eight years, and during the course of these it has taken a number of reform measures. Gu also claimed that as a result China's market openness has exceeded those of many contracting parties and in some even areas even of some developed contracting parties.

The Chinese vice-minister said that "the patience of the general public of China" over GATT re-entry was also facing a serious test and hoped for these reasons there would be joint efforts to ensure China joining the WTO as a founding member.

After the discussions in this week's working party and the 'requests' received from various contracting parties, China would put forward a package proposal based on the principle of balance of rights and obligations and China's economic and trade restructuring, Gu said.

"Based on GATT and WTO requirements on developing countries, this comprehensive package would be designed to meet the demands of contracting parties to the maximum extent possible," Gu said.

"However, the time of implementation for this package will be linked with the time of resumption of China's GATT status and its entry into WTO as a founding member.

"For those things, we are unable to do, we would honestly tell contracting parties, and as a developing country, China can only assume obligations commensurate with the level of its economic development and the obligations China undertakes for resumption of its GATT status must be compatible with the process of China's economic and trade restructuring. Only in this way can the Resumption negotiations be conducive to the establishment of a sound market economic system in China and to the social stability and sustainable economic growth as well."