U.S. and Chinese negotiators agreed today on the terms for Beijing's entry into the World Trade Organization, officials from both sides said after a marathon six-day negotiating session that almost collapsed on several occasions. No details were released of the historic deal that would ultimately have an enormous effect on the economy of the world's most populous country amd have huge ramifications for trade relations between the United States and China.
Reporters were summoned this afternoon to the Ministry for Foreign Economic Relations and Trade where a signing ceremony was held. The negotiations were originally scheduled to last two days but, at the urging of Chinese officials, U.S. Trade Representative Charlene Barshefsky's team continued to delay its departure from Beijing.
At times, both sides flung nasty words at each other through the media. Barshefsky warned the Chinese on Friday that time was running out. The Chinese countered on Saturday that U.S. negotiators were not compromising.
At other times, a deal seemed imminent, On Saturday, Barshefsky met with Premier Zhu Rongji, a backer of China's entry into the WTO, and he apparently resolved a logjam in the talks.
American business leaders hailed today's agreement.
"The American business community here is delighted a deal is now at hand," said Richard Latham, chairman of the American Chamber of Commerce in China.
China's entry into the world trade body will be a historic step for this country of 1.3 billion people. "No economic event in the history of the People's Republic of China is of comparable significance to China's possible entry into the WTO, with the exception of the 'reform and open door' policy implemented in 1978," said a report issued earlier this year by the China International Capital Corp., a joint venture investment bank between Morgan Stanley and the Bank of China. "Access to the WTO could provide a badly needed push for China's economic reforms and further integrate the country into the world economy."
The two sides struggled throughout the talks on the core issues bedeviling them, said a source close to the Chinese negotiating team. The main areas of contention were in telecommunications, textiles and the financial services sector, the source said.
The difficulty in reaching a deal illustrated the struggle within the Chinese leadership over the issue of whether and on what terms China should accede to the WTO. A senior Chinese official said WTO membership, which China has been pursuing for 13 years, has been the most hotly debated topic in his generation since the 1989 crackdown on Tiananmen Square.
The difficulties were also an illustration of Zhu's limited power. U.S. officials reported that Saturday's meeting with Zhu succeeded in removing an unspecified logjam in the talks. But despite Zhu's entry into the fray, no deal was ready. After his trip to the United States in April, during which he lobbied hard for the Americans to accept China's terms, Zhu offered to resign from his post. Subsequently, the WTO portfolio was transferred to President Jiang Zemin, Chinese sources said.
One of the most curious aspects of the talks has been the almost total silence about them in China's media. The outcome of these negotiations could ultimately have a huge effect on how business is done in China, how people work and how trade is conducted. Yet there has been scant news in the Chinese language press and electronic media about the battle of words raging between American and Chinese negotiators within the confines of the Ministry of Foreign Trade.
U.S. negotiators wanted China to agree to allow majority ownership of certain kinds of telecommunications service providers, a proposal originally offered by Zhu in April during negotiations in Washington, but China has resisted, said the source close to the Chinese negotiating team. The two sides also haggled over how long China would be required to abide by textile quotas in the U.S. market. The U.S. also wanted China to make broader commitments to open its banking and insurance sectors, the source said.
Another source close to the Chinese leadership reported that after the talks ended Sunday night, two members of the Chinese team expressed anger at the Americans. "The Americans won't compromise," the source said. "They seem to want everything or nothing at all. They've made this mistake before. Are they going to make it again?"
Joining the WTO could bring big losses for bosses of China's monopoly industries, backward factories and farmers, among others. Millions of workers would likely lose their jobs in the short term. Zhu, and his chief trade negotiator Long Yongtu, were labeled as traitorous by conservatives for appearing to give too many concessions to the United States in April.
One of the most powerful critics has been Wu Jichuan, the conservative head of China's Ministry of Information industry. One WTO proponent speculated today that Wu could have been trying to play the role of "spoiler" in the negotiations. He oversees China's telecommunications monopoly and opposes foreign ownership.