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Statement by Mr. Long Yongtu, Assistant Minister of MOFTEC, at the First Meeting of the Working Party on China's Accession to WTO (March 22, 1996, Geneva)
Mr. Chairman,

The Chinese delegation is very pleased to attend the first meeting of the Working Party on China's accession to WTO. This meeting provides an opportunity for both the Chinese delegation and WTO members to review the historical process of negotiation on China's accession to the multilateral trading system. This meeting also enables us to look into the future of this ongoing process.

The resumption negotiation of China has been an unusual event in the history of GATT. Now all WTO members have admitted that the inclusion of China in the multilateral trading system, a highly dynamic economy with enormous potential will contribute significantly to the stable growth of the world economy as well as the strengthening of the multilateral trading system. China's application for resuming its status in GATT and acceding to WTO is an integral part of China's general policy of opening up and reforms. In spite of the nine-year long delay in the negotiation, our policy on participating in the multilateral trading system has not changed, and will remain unchanged.

We have a clear understanding that China's integration with the multilateral trading system should be based on our commitments to observing the rules of GATT and WTO and the gradual liberalisation of our market reflecting the balance between rights and obligations. During the past nine years, the Chinese delegation has made great efforts in the negotiations with other contracting parties in these two areas.

From 1986, although China was not a contracting party to GATT, it had actively participated in the whole process of the Uruguay Round negotiation. In April 1994, the Chinese representative, authorized by its Central Government, signed the Final ACT of the Uruguay Round in Marrekesh along with other participants. This reflects a solemn commitment of the Chinese government to observe international trade regulations and a strong support to the multilateral trading system. The Chinese government fully realises the serious implications of the commitment that it has made in Marrekesh. That is, upon entry into WTO, the Uruguay Round agreement will become part of China's international obligation with legally binding force.

On the other hand, China has in the course of market access negotiations, made a series of important commitments leading to substantial liberalisation of the Chinese market. Here, I would like to highlight a few aspects:

1. Tariffs

The substantive negotiations on tariffs started from 1994. In September 1994, China submitted to the Secretariat the package offer of tariff concession. In our offer, we committed to reduce the simple average of the 1992 tariff rate from 43.7% to 18.6%. The reduction margin amounted to 57.4%. The tariff rate for the industrial products would be reduced from 42.8% to 18.1% in five years time representing a 57.7% cut. Tariff rate for the agricultural products would be brought down from 46.1% to 22.1% in 10 years. The margin is 52.1%. In subsequent bilateral market access negotiations, we improved the above offer, and promised to consider further shortening the implementation period.

In this connection, I would like to emphasize in particular the important announcement made last November by our President Jiang Zemin in Osaka APEC meeting regarding China's decision to slash tariff rate by no less than 30%. In according with President Jiang Zemin's announcement, the Chinese delegation has submitted detailed tariff reduction list for 4996 items to the Secretariat during this Working Party session. We have announced that the implementation will begin on April 1, 1996. This represents the reduction of the single average rate from 35.3% to 23%, with a 35% reduction. The tariffs for industrial products will be brought down from 34.5% to 21.5%, with a 37.7% cut. The tariffs for agricultural products will drop from 40.3% to 32.5%, with a 20% cut. After this round of tariff reduction, China has brought down its tariff level to 23%, basically meeting its commitment made in 1994 to reduce the tariff level to 18.6% within 5 to 10 years. This constitutes a credit of China's future obligation to WTO. Thus this heavily front loaded reduction has considerably shortened the implementation period of tariff commitment that China has made in the framework of WTO tariff offer and will enable us to initiate further tariff negotiation on the much lower basis.

2. Non-Tariff Measures

In 1992, there were 1247 items subject to non-tariff measures including import licences, quotas and tendering. After several years of efforts, China has gradually reduced the number of products subject to non-tariff measures to a large extent. Currently, only about 400 items are left. This is a two-third reduction compared to the base year of 1992. We are committed to put forward soon a phase out timetable for the remaining items in order to bring our import administration system into conformity with the international standards.

3. Trade in Services

According to the principles of progressive liberalisation in GATs, through several rounds of negotiations with various members, China has submitted and substantively modified thereafter the schedule of commitment. Currently, China's commitment in the service sector covers more than 30 sectors and sub-sectors, including the financial sector (banking and insurance), value added telecommunication services, retailing and wholesale services, maritime transportation services, legal, accounting, translation, tourism, civil aviation, education and environment services. China's schedule of commitment is among the front runners of developing countries in respect of the numbers of sectors covered and the level of concession.

The above mentioned facts demonstrated that, since China has signed the Uruguay Round Agreement, and at the same time made great efforts in liberalising its market. It would be justified to say China has met the basic conditions for the membership of WTO. But regrettably, due to reasons known to all, China still has not acceded to WTO, and therefore is not legally bound to implement the Uruguay Round Agreement. Ironically, those who have loudly accused China for not willing to undertake the obligation for international rules are exactly those who have tried to deprive China of its right to implement the Uruguay Round Agreements. Because they have delayed the process of China's accession to WTO and consequently have caused damages to the universality and fairness of the multilateral trading system as well as the practical economic interests of WTO members. It is fair to say that keeping China out of WTO is unwise and will end up by damaging their own interests. We believe that no force in this world, can stop China from developing economic and trade relations with other countries on the basis of equality and mutual benefit.

Mr. Chairman,

We hold that the top priority at this date for China's accession is to keep political interference of all kinds out of this process and put the accession negotiation back into the normal track of international economic and trade negotiations. In order to reach a package agreement with balanced rights and obligations on the basis of the Uruguay Round Agreements, China will continue to make further efforts towards this objective. In the meantime, I would like to remind participating countries in this process that China's market liberalisation has to be conducted in a progressive manner consistent with its level of economic development. China will abide by the international rules as contained in the Uruguay Round Agreement signed by all participants and any other conditions of discriminatory nature beyond the Uruguay Round Agreement will not be acceptable.

Mr. Chairman,

Finally I would like to emphasize that, considering the succession relationship of WTO and GATT, as well as the continuity of the accession negotiation itself, we are ready to reach an understanding with WTO members that all agreements, commitments and understandings reached between China and contracting parties in the framework of GATT negotiations will remain valid.

Mr. Chairman,

The accession of China and other economies to WTO is an important component of the historical process of world economic integration. It requires both political will and economic vision to push forward this process. We sincerely hope to strengthen cooperation with WTO members in making joint efforts to achieve the objective of China's early accession to WTO.

Thank you, Mr. Chairman.


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