By Clay Chandler Washington Post Staff Writer Tuesday, February 27, 2001; Page E02
SHANGHAI, Feb. 26 -- Chinese trade officials have signaled that Beijing is likely to delay China's accession to the World Trade Organization beyond October, renewing concerns among Western executives and trade officials about China's commitment to join the international trade panel.
The China Business Times, a state-run financial daily, reported today that China's foreign trade minister, Shi Guangsheng, has dismissed as "inaccurate" predictions that China is likely to be admitted to the global trade group by early summer.
The newspaper said Shi's remarks were prompted by comments from top European Union trade negotiator Pascal Lamy, who suggested in Hong Kong last week that final negotiations regarding terms of WTO entry for China could be concluded as early as March, with formal admission following a few months later.
The newspaper quoted officials at China's Ministry of Foreign Trade and Economic Cooperation as saying that rewriting China's domestic legal code to conform with WTO rules would take a minimum of several months -- precluding the possibility of China's accession within the first half of 2001.
"It's hard to say whether this is real or just a negotiating ploy" by Chinese trade officials, said Andy Xie, China economist at Morgan Stanley Dean Witter & Co. in Hong Kong. "So far the waiting game has worked to China's advantage, giving its industries more time to prepare for foreign competition. But I don't see many benefits to further delay."
Congress voted last year in favor of establishing "permanent normal trade relations" with China, once it joins the WTO. After joining, China will gain the same low-tariff trade status that other major U.S. trade partners enjoy, and its status will no longer be subject to an annual congressional review of its human rights record.
China has been seeking entry into the WTO since 1986. It has signed bilateral accession agreements with every WTO member except Mexico. But negotiators must work out terms of a multilateral accession accord needed before China's membership is complete.
Some Western trade experts worry that China's enthusiasm for joining the WTO has ebbed steadily since signing the bilateral agreement with the United States. Global trade officials see the negotiations over that deal as the biggest hurdle to China's membership and predict that subsequent discussions with other nations would proceed with little trouble.
Instead, even small issues have proved extraordinarily difficult to resolve. On agriculture, for example, Beijing has insisted that China be designated a developing economy and thus permitted to continue support payments to its farming sector. But negotiators from the United States and Western Europe have insisted that China -- which has replaced Japan as the nation with which the United States has the largest trading deficit -- is too large and growing too fast to deserve such lenient treatment.
Peasants account for about 900 million of China's 1.3 billion population. Terms of bilateral agreements signed with the United States and the European Union require China to lower tariffs and raise import quotas on staples such as wheat, corn and soy beans.
China's leaders consider maintaining a self-sufficient grain sector to be a matter of national security. Western economists decry the state's grain-buying program as inefficient. Chinese farmers complain the subsidies are too small to provide anything more than a subsistence income. Many farmers have already begun shifting to more profitable crops and could benefit from expanded trade opportunities under the WTO agreement.