WTO Special Report: The Real Work Begins
After 13 years, China's accession is finally within reach
THE NOVEMBER 15 AGREEMENT BETWEEN THE GOVERNMENTS OF THE United States and China on the terms of China's accession to the World Trade Organization (WTO) has moved China closer than ever to joining the world trading body. China now must complete the WTO accession process, which involves a series of bilateral and multilateral negotiations to develop a final Protocol of Accession that takes the concerns of all other WTO members into account. This process could take at least six months.
Separate from this process, and because of US law, the United States may only benefit fully from China's accession once Congress grants China permanent Normal Trade Relations (PNTR) status.
As The CBR goes to press, only the broad outline of the bilateral agreement has been made public. But the details that are available reveal the depth of the PRC leadership's commitment to bringing China's economy into line with WTO obligations. The steps China has declared itself willing to take would significantly overhaul not only the environment for foreign investment and trade in China, but also the Chinese economy. These steps will open the PRC market across the board to imports of foreign goods, and open currently closed sectors to foreign participation. Among the key sectors that the bilateral agreement addresses are agriculture, telecommunications, and financial services.
The US-China agreement on Chinas WTO accession lays out a substantial set of commitments that China will have to meet as a WTO member. The commitments in this bilateral will appear in China's final Protocol of Accession, unless they are supplanted by better terms arising out of future bilateral and multilateral WTO negotiations.
The following tables, organized by sector, detail the agreement's terms as they appeared in the summary released by the White House Office of Public Liaison on November 17, 1999 (with the exception of the information on the audiovisual sector, which was updated more recently). The tables also highlight the areas of the US economy that will be most affected by the agreement. These include:
* Agriculture China has agreed to eliminate export subsidies, permit agricultural trade outside of government-controlled channels, slash tariffs, and eliminate sanitary and phytosanitary barriers not based on scientific evidence. A tariff-rate quota system for bulk commodities will provide a share for private traders. Agricultural firms will have the right to import into China and distribute products directly.
* Industry China has agreed to phase out quotas, and phase out or cut tariffs dramatically on a broad range of industrial goods. China will also allow non-bank auto financing and participate in the Information Technology Agreement (ITA), which calls for elimination of tariffs on IT products.
* Services China has made commitments in all major service categories to eliminate most foreign-equity and geographic restrictions. The PRC will accede to the WTO's Basic Telecommunications and Financial Services agreements, and will "grandfather" current market-access benefits. China's service sector accounts for one-third of its GDR US service companies will be well positioned to compete.
* Trading and distribution rights China has agreed to define "distribution" broadly to include wholesaling, retailing, maintenance, repair, and transportation. US firms will be able to trade, distribute, and sell goods themselves, as well as engage in auxiliary services such as leasing, air-courier, warehousing, advertising, and packaging. This is a critical factor in US business success in international markets, but China currently denies these rights to US companies in China.
Effects of WTO-accession
After China completes its accession process, and once the US Congress grants China permanent Normal Trade Relations status, the United States …
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Publication information: Article title: WTO Special Report: The Real Work Begins. Contributors: Not available. Magazine title: The China Business Review. Volume: 27. Issue: 1 Publication date: January/February 2000. Page number: 17+. © U.S.-China Business Council Mar/Apr 2009. Provided by ProQuest LLC. All Rights Reserved.
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