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Statement of H. E. Vice Minister Long Yongtu at the Fifth Meeting of the Working Party on China's Accession to the WTO (Geneva, 1 August 1997)
Mr. Chairman,

I would like to begin by saying how pleased I am to head the Chinese delegation to attend the Fifth Meeting of the Working Party on China's Accession to the WTO. The negotiation on the drafting of the Accession Protocol achieved significant results at previous Working Party meetings. In order to push ahead the market access negotiation which has been relatively lagging behind and to enable it to achieve balanced progress as with the negotiation on the Protocol, the Chinese delegation held bilateral market access consultations with 17 WTO members prior to this meeting, which were both intensive and productive. In the spirit of flexibility and pragmatism, the Chinese delegation has made some new efforts. In the meantime, China's efforts also won favorable response from some WTO members. They worked day and night to evaluate the offer of the Chinese side and made quick response to our initiatives. We appreciate the efforts made by these members and regard this attitude of cooperation as their support to China's reform and opening-up. I would like to call on all WTO members to adopt the same positive, practical and responsible attitude so as to bring the negotiation to continued progress.

It is fair to say that the firm political commitment of the Chinese government on an early accession to the WTO has been translated into concrete actions taken by the Chinese delegation in the current round of market access negotiation. After a series of difficult domestic coordination, the Chinese side has once again revised several annexes to the Protocol and further enhanced the transparency of China's foreign trade regime. Our market access offer has been substantially improved in the following areas:

First, given the importance and sensitivity of agricultural sector in world trade, the Chinese government has decided to give up the right to reintroduce export subsidies for agricultural products, a right China had intended to reserve up till recently. Frankly speaking, in view of the fact that some big agricultural countries are still maintaining substantial export subsidies, and against the background that China has fully undertaken the obligation of reducing agricultural export subsidies as stipulated in the Agreement on Agriculture, it could not be viewed as a fair approach to request China to undertake the obligation of complete elimination of such subsidies. However, after fully taking into account the development trend of international trade in agricultural products, especially the repeated calls made by the Cairns Group, many members of which are developing countries, the Chinese government has made this difficult decision. This is a new and major contribution the Chinese government has made to the strengthening of the world multilateral trading system. Here I must point out that now that the Chinese government has made the above-mentioned decision, China shall not be challenged for its rights to implement "green box policies" in the area of domestic support for agriculture under the Agreement on Agriculture.

Second, with respect to Non-Tariff Measures (NTMs), after careful considerations, we have decided to make drastic and cross-the-board reduction of the phase-out schedule of non-tariff measures. We are prepared to shorten the phase-out period for 86 items from the original 12 years to 8 years which include automobiles and auto parts, and we have proposed maximum reduction of the phase-out schedule of the remaining NTMs. To ensure a smooth elimination of the Non-tariff measures, we have also proposed annual growth rates of the quota ranging from 8% to 12% during the transition, which will provide foreign suppliers of automobile, other machinery and electronic products of all members with a gradually expanding market access opportunity. I wish to stress that, those products, especially automobiles, for which China intended to maintain non-tariff measures for longer periods are the most difficult and most sensitive sectors in China. By making this decision, we have fully demonstrated our determination in eliminating market access barriers. This is also a tremendous effort China has made within its domestic economic affordability.

Thirdly, regarding tariffs, we held tariff negotiations with nearly 20 WTO members before this Working Party meeting. In the course of such negotiations, we made progress with all members to different degrees, and major progress with a number of countries. We substantially improved our offers to all negotiating partners, tabled the harmonized tariff proposal for over 2000 chemical and textile products, and further improved our offers on auto and auto parts, paper and paper products, some electrical home appliances and agricultural products. Once our tariff concession proposal comes into force, China's overall average tariff level will be lower than the 15% average tariff level announced by the Chinese government. This demonstrates that China has taken an important step in lowering tariffs.

So far as trade in services is concerned, it is of course understandable that members expressed concerns that we did not present any new offer during this meeting. However, it is not realistic to expect any negotiation to make parallel progress in all areas at the same time, let alone in such a negotiation of China's accession to the WTO which involves wide-ranging subjects and complicated issues. It is thus unfair to accuse China on such a ground. Right at this moment, our intense domestic coordination is still going on. We will make utmost efforts to present a comprehensive offer either in late August or early September, and we will immediately enter into serious consultations with WTO members thereafter so as to make progress in this area. After said that, I wish to emphasize that, given that trade in services is a new area of WTO negotiation, liberalization of service trade shall be a progressive progress, and there should be a realistic expectation on the opening-up of China's service sectors. Progressive liberalization is in the interest of the development of China's service industry, and only when China's service industry continues to grow can it provide foreign service providers with greater market access opportunities.

Mr. Chairman,

China has taken major steps in market access, which not only represent new efforts made by the Chinese government for the purpose of accelerating the WTO accession process, but more importantly they are necessitated by China's own objective to further expand the opening-up process. These measures also reflect that China supports the multilateral trading system represented by the WTO, and is taking concrete actions to participate in the process of global and regional trade and investment liberalization process.

Mr. Chairman,

We are aware that despite of the progress we have made in the market access negotiations, as in any other negotiation, there will always be gaps until the final conclusion of the negotiations. My colleagues and I have fully realized how difficult this negotiation will be. However, I must point out that although it is understandable for WTO members to have great expectations on the Chinese market, the negotiation on China's accession to the WTO shall proceed within the specific framework and scope as defined by the WTO Agreements, and there are limits to both its functions and capacity. It is not and will not be the only opportunity or last chance to seek for the opening of China's market. I wish to stress that, after becoming a WTO member, China will continue to participate in multilateral trade negotiations and improve its extent of market liberalization. In this sense, the market access negotiation on China's accession is just the beginning of China's participation in the multilateral trading system in the future as well as of the historical process of continued market liberalization in China. We hope the WTO members will adopt a long-term view in this regard. More haste sometimes result in less speed. It is precisely for this reason that we hope the WTO members will make realistic requests in line with China's current level of economic development. Only when the requests are realistic, can there be positive response.

Mr. Chairman,

The next few months will be crucial to the negotiation on China's accession to the WTO. The Chinese delegation will continue to cooperate closely with WTO members, and through intensive and extensive consultations, we will strive to make greater progress at the next Working Party meeting.

Thank you!
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