EU blow to China's WTO bid

Trade talks between China and the European Union seen as vital to China's entry into the World Trade Organisation have broken up without agreement.

An EU statement said progress had been made during four days of talks in Beijing, but not enough for EU negotiators to believe a deal could be reached now.

No date had been set for a resumption of the negotiations.

Taiwan threat

This is the second blow ina week for China's 14-year attempt to join the WTO.

On Wednesday, US senators said they might scupper China's attempt to join the organisation because of Beijing's warning that Taiwan must eventually negotiate unification with the mainland or face a possible war.

But an EC spokesman, Anthony Gooch, said Sino-European talks were being conducted on trade criteria and had not been influenced by the Taiwan controversy.

"The WTO talks are being taken forward on the basis of the criteria of accession to the WTO," he said.

Agreement between the two sides would have removed the biggest remaining obstacle to China's membership.

Telecoms market

Earlier, reports had suggested that the European delegation had got most of the concessions it was seeking, but was still demanding a further opening up of the Chinese market for telecommunications, financial services and insurance.

EU negotiators were believed to be pressing for 51% foreign ownership of Chinese networks - a concession that would top an offer made to the US in a WTO agreement at the end of last year.

Successful negotiations would make it easier for companies from the EU to sell their wares to China's 1.2 billion customers, while Chinese exporters should face fewer barriers to export their goods to Europe - and other countries around the world.

Optimistic note

The EU is the most important WTO member that has yet to conclude a deal with China.

The Sino-European talks opened on an optimistic note on Monday and entered an unscheduled fourth day.

Throughout the talks, EU trade commissioner Pascal Lamy remained on standby to board a plane to fly to Beijing if an agreement appeared to be close.

After the historic agreement with the US last November, US officials had been anxious for China to reach agreements with the EU and several other countries so they could send the deal to Congress for a vote.