5:13 AM Aug 2, 1994


Geneva 29 July (Chakravarthi Raghavan) -- The working party drafting a protocol on China's resumption of status as a GATT contracting party ended two days of discussions, with the next round of multilateral talks to be held end of September or beginning of October on dates to be set by Chairman, Pierre-Louis Girard of Switzerland.

Meanwhile China is due to present by end of August its revised schedules on market access, in agriculture and in services and will organize a series of bilateral discussions with key contracting parties in the first three weeks of September.

In August, Canada and New Zealand will send their officials to Beijing for bilateral talks. China will be sending its officials to Australia similarly for bilateral talks. US and Chinese teams are also due to meet on some technical issues.

The tone of the speeches at the final plenary meeting suggested an effort on all sides to soften the confrontational style of the last few weeks. Whether this will lead to compromises remains to be seen.

The Chinese Assistant Minister, Mr. Long Yongtu, told the closing session of the working party on Friday that the Chinese delegation had undertaken over the last two days frank discussions and, as a result the positions of respective parties had been further clarified. China would participate in the negotiations with a constructive attitude and in the same spirit hoped contracting parties would adopt a 'realistic attitude based on the reality of China' to work out a protocol balanced between rights and obligations.

Long reiterated that the overall strategy of China's reform and opening to the outside world was one of "gradual progress".

Major reforms of foreign exchange and taxation had been undertaken at the end of last year and beginning of 1994 and "we need time to adjust and consolidate". The further reform of China's foreign trade regime and further liberalisation of market access had to be in pace with overall economic structural reforms.

Therefore, in the process of China's GATT resumption, "it is impossible to resolve all the problems" in China's economic trade regime and "the excessive expectation to the market opening in China is also not realistic", Long added.

The orderly and healthy progress of economic and trade reform was an important condition for China's economic development and social stability and a stable and continuously developing China would provide the world with maximum market access. After resumption of its GATT status, China would continue its market-oriented economic and trade reforms and the Chinese market along with its economic development would be even more expanded.

"We hope that contracting parties can adopt a far-sighted view in dealing with China's GATT resumption", Long said.

The improvement of three schedules in the comprehensive package was based on a protocol balanced between rights and obligations. Otherwise, the improvements would not make any sense, he said.

China hoped to continue consultations with cps through all channels so as to narrow the differences over the protocol.

The efforts China had made in the past eight years to resume its GATT contracting status had been aimed at creating a better environment for international trade and to promote economic and trade development. China firmly supported the GATT/WTO multilateral trading system and its signature to the Final Act was a strong indication that China would abide by the rules and disciplines of the new WTO. China favoured strengthening the multilateral trading system and its efforts for resumption of GATT status itself represented a concrete action towards this end.

But without China's participation, the universality of the WTO would be impaired and the multilateral trading system was incomplete, he pointed out.

Malaysia speaking for the ASEAN group of countries said they looked forward to the improved proposals from China in September.

Asean, Malaysia said, recognized the need for early resumption of China's GATT status and early conclusion of negotiations to bring China into the WTO as a original member.

While China could not be exempted from its obligations as a contracting party, it may not also be denied its rights as a contracting party, including the right as a developing country.

It was important also to recognise, Malaysia added, that in the context of China's obligation, it is a transition economy in a special situation, while recognizing the uncertainty in the Chinese economy and its huge export potential which may concern many other contracting parties and traders. It was logical and desirable and practical to institute transitional measures both as regards China and with respect to contracting parties.

Recognizing the vast potential of the Chinese market, Asean was looking forward, with a positive and constructive outlook, to the important market access negotiations.

The United States welcomed the various texts (Chairman's nonpaper and the Chinese non-paper) and said the process had been taken further. The US understood better Chinese intentions with respect to their rights and obligations.

The US would need "acceptable schedules" in the three areas, but the US attitude could not depend solely on these schedules. The US intended to have a team in Beijing next month to discuss in earnest. It would also table its market access demands and hold discussions in Washington (with China) on Technical Barriers to Trade, Sanitary and Phytosanitary rules and Customs Valuation.

Japan welcomed the various papers, but noted the serious differences between the Chairman's and Chinese papers.

In Japan's view the market access negotiations and that on the protocol should move forward side by side. Japan expected to meet with the Chinese side on market access at the time of the next meeting of the working party at the end of September.

New Zealand also welcomed the various proposals and said the Chinese paper structured in the same way as the Chairman's had helped better understanding of the outstanding issues. New Zealand hoped the momentum would not falter.

In his summing up, Chairman Girard said the discussions had been on the basis of the two negotiating instruments. The fact that the Chinese non-paper was structured along the same lines as the Chair's revised non-paper had facilitated comparison of positions and focusing of positions.

For the first time, he said, the working party had before it major parameters as basis for negotiating draft protocol on China.

While progress had been made beyond areas of convergence already established at the last meeting, there were some new areas where there was a possibility of convergence within an agreed framework.

But there were some areas still with wide divergence of views. Some of the problems were of substantive nature, while others were of more formal/presentational nature. In yet others there was need for further factual clarification.

Without elaborating on points of convergence and divergence, Girard said there was need to reflect on new inputs and results of informal discussions. Important work remained to be done at both multilateral and bilateral levels.

There was wide recognition that the drafting of the protocol and bilateral negotiations on market access commitments had to go hand-in-hand. There was much significance attached to bilaterals scheduled for late August and early September, he added.