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Friday, 19 May, 2000, 14:27 GMT 15:27 UK
Analysis: China's WTO hopes
The EU's Pascal Lamy and and China's Shi Guangsheng shake hands on the trade deal
Global trade is on their mind...
China's agreement with the European Union brings membership of the World Trade Organisation (WTO) a very large step closer. BBC economics correspondent Andrew Walker explains the implications.

China wanted to be a founder member of the WTO when the organisation began its work in 1995.

It had also been trying to sign up to the WTO's predecessor, the General Agreement on Tariffs and Trade (GATT) for many years before that.

At last it seems to be close to fufilling its hopes, even though a small number of other WTO countries still want to make bilateral deals.

Access rights, not privileges

In fact China already has access to many WTO countries' markets on favourable terms.

But WTO membership would mean it has that access as a right, not a privilege.

It should also mean that China would not be subject to the uncertainty and political lobbying that goes with the annual renewal of its trade access to the United States.

That is a contentious issue in the US Congress. Some congressmen are concerned about the prospect of Chinese competition for American industry, others regard annual review of trade relations as a useful lever of influence over China's approach to human rights.

A vote on whether to ratify the deal is due next week.

The Chinese market

For China's trading partners, a final deal would enhance their access to this large and fast growing market.

China could well become the world's largest economy sometime in the next few decades.

And for all parties, the WTO would provide a means of resolving disputes about alleged unfair trade practices.

If China and the WTO's current members can complete the remaining stages soon it would be a welcome positive development for the organisation, after the humiliating failure of its attempt to launch a new round of world trade talks at a meeting in Seattle last year.

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19 May 00 | Business
EU-China agree trade deal
18 May 00 | Business
Business lobbies hard on China
10 May 00 | Business
US trade battleground
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