Tue, 14 Nov 2000

Steady progress

The conclusion of China's 14-year campaign to join the World Trade Organization (WTO) has moved forward following a negotiating breakthrough in Geneva on membership terms. These set out judicial procedures for handling complaints by foreign companies doing business in China and rules on how import tariff quotas would be set.

These are important landmarks on China's road to WTO membership, and trade diplomats enthusiastically predict that the accession negotiations may be concluded by the end of the year.

The euphoria at WTO headquarters is understandable.

Trade negotiations are long, arduous and rarely crowned with quick success. When there is a breakthrough, it is tempting to make the most of it. But optimism, though excusable in these circumstances, must be tempered with reality.

There are at least seven other areas China and other WTO members have yet to agree on. These include complex issues such as intellectual property, industrial subsidies, and anti-dumping and countervailing duties, which could take a long while to resolve.

There is no doubt that Chinese leaders want to do whatever is necessary for early membership.

They have made it clear that WTO membership is an essential element of their strategy to modernize the country. But China's main trading partners want to see serious progress in translating Beijing's WTO obligations into national law and practice.

China, too, sees this as a priority, but progress towards incorporating international obligations into the Chinese system is a complex process.

Likewise, the process will suffer if foreign investors strike behind-the-scenes deals when they run into problems, rather than turn to the WTO system for resolution of their disputes.

For the sake not only of China but the rest of the world, it is important to keep the momentum going.

Just as China needs to join the WTO, the WTO will benefit from having China on the inside rather than watching from the sidelines.

Leaving China outside the WTO could in the long run undermine the organization, in the same way as the US refusal to join the League of Nations following World War I fatally undermined that organization.

-- The South China Morning Post, Hong Kong