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Monday, 17 September, 2001, 17:36 GMT 18:36 UK
China enters WTO fold
Chinese workers push a cart with pipes loaded along a street of Beijing
Beijing: Preparing to build on WTO membership
By the BBC's Geneva correspondent Emma Jane Kirby

After 15 years of negotiations, bitter disputes and stand offs, China has finally been given formal approval to join the World Trade Organisation.

A 15-year process is a blink of the eye in the 5,000-year history of China

Long Yongtu, chief Chinese trade negotiator
At a meeting in Geneva on Monday afternoon, trade officials rubber stamped an 800-page document approving China's bid.

"It's a historical day in the young life of WTO," World Trade Organisation spokesman Keith Rockwell said.

The move means China should become an official WTO member by the end of this year or early next year.

Monday's formal approval, which requires rubber stamping at the WTO ministerial meeting in Qatar in November, will be greeted triumphantly by Chinese leaders.

Chief Chinese trade negotiator Long Yongtu, said: "We are part of a historical event, an event which will bring a country with one fourth of the world population into the multilateral trading system."

Mr Long proclaimed China`s membership as an "historical event" and "a win for the whole world." While admitting the 15 year struggle to gain entry to the global trade body had been a "marathon like negotiation, " he joked: "A 15-year process is a blink of the eye in the 5,000-year history of China."

And the EU trade commissioner, Pascal Lamy, said that the long-awaited move should boost the world trading system which has been under attack from anti-globalisation protesters.

"At this difficult time, the important work concluded today in Geneva provides this system and us all with a much-needed boost of confidence and hope for the future," he said.

The chief of the World Trade Organisation, Mike Moore, said the decision to admit China into the WTO was "a fine moment in the history of cooperation between nations".

He added: "The world will become a more competitive place now and that can only be a good thing. This is a time for enormous celebration."

Disputes with the US and the EU over details held up the final signing of the agreement for more than a year.

Longstanding plans

Since 1986, when China first applied to join the WTO's predecessor, the General Agreement on Tariffs and Trade (GATT), its bid has been fraught with political difficulties.

Long Yongtu, right, head of the Chinese delegation in Geneva
Terms of China's membership secured

Beijing's crack down on China's pro-democracy movement, and the angry stand offs in May 1999 after Nato's bombing of the Chinese embassy in Belgrade, which China believed to be deliberate, caused a backlash leading to further delays..

Earlier this year, the application process looked likely to be unseated again when China and the US argued over agricultural subsidies.

China demanded the right to be able to subsidise its farmers up to 10% - the levels permitted for developing countries - but finally agreed to settle at 8.5%.

And only last week, trade officials were expressing private concerns that an agreement would not be reached in time between the US and the EU who were locked into bitter dispute over insurance markets in China.

US insurance company AIG, which has operated in China since 1994, wanted assurances that it could continue to expand in the country without having to share new ventures with Chinese partners.

Agreement sealed

But the EU argued that for the Americans to hold 100% ownership of any new branches AIG might open, was a violation of the WTO "most favoured nation" (MFN) principle under which all members have to give equal treatment to each other's goods and service providers.

In the early hours of Saturday morning, an agreement was reached between the two parties, although the terms are open to interpretation and may well cause disputes in the future.

As the world's fifth largest exporter and sixth largest importer of manufactured goods, China's entry into the global trade body will not go unnoticed.

Developing giant

With a population of some 1.3 billion, China is the world's largest developing country and many poor countries hope that it will readdress the balance in the WTO away from the big industrialized nations of the US, the EU, Canada and Japan.

But there are fears from developing countries that China's now increased access to lucrative global markets will have disastrous consequences.

They are concerned that Chinese goods will capture Western markets from them, especially in areas such as textiles and footwear.

In the coming few years, as China lowers its import tariffs and opens up once highly-protected sectors such as banking and telecommunications, Chinese consumers are likely to see many more products entering its market, and at lower prices.

But giving greater access to foreign business will also have some serious knock on effects for China's state run heavy industries and family run farms, which are unlikely to be able to stand up against faster, more efficient foreign competitors.

Domestic fears

Some analysts argue that this will be the necessary catalyst for Beijing to reform such antiquated industries and that, in the long term, foreign investment and a more direct link with the international community can only bring more opportunities for China.

But other economists warn of millions of job losses as state firms and agricultural enterprises face up to foreign competition.

The result could be widespread protests and social unrest.

China's 15-year race to join the WTO may now be over, but its clear that for Beijing's rulers, another domestic marathon is about to begin.

The BBC's Emma Jane Kirby
"China will now have to open its market to foreign imports"
See also:

17 Sep 01 | Business
China and WTO reach final accord
15 Nov 99 | The Economy
WTO hails China deal
19 Feb 01 | Business
China reforms stock market
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