China edging to U.S. deal on WTO

U.S. trade representative Robert Zoellick will meet China's Long Yongtu in Shanghai in June

GENEVA, Switzerland (Reuters) -- China is edging toward a deal with the United States that could clear Beijing's entry this year to the World Trade Organization, a senior Chinese official said Monday.

Long Yongtu, Beijing's top trade negotiator, told reporters China had given U.S. officials its detailed reply to proposals submitted by Washington in March to end an impasse in the 14-year negotiations.

"They are going to study our response and we are going to meet again soon, and I believe we can find solutions," he said.

The U.S. proposals themselves had been "constructive," he added.

Key meeting in Shanghai next month

Long indicated that he would be holding a key meeting on the issue with U.S. Trade Representative Robert Zoellick in Shanghai on the margins of a ministerial meeting of the Asia-Pacific Economic Cooperation (APEC) grouping on June 7-8.

"I think they will respond to our ideas in Shanghai," he said, speaking after meeting WTO Director-General Mike Moore, who will also be at the APEC gathering.

Although China completed its bilateral negotiations on WTO entry with the United States in late 1999, Washington has since taken the lead in opposing Beijing's demand that it have the right to grant big subsidies to its farmers.

China, currently subsidizing agriculture at a level of under 3 percent of the value of production, has consistently argued that as a developing country it should be allowed to increase this to 10 percent.

The United States, under pressure from farmers who have been eyeing the vast potential of China's market once it is in the WTO and subject to its open trading rules, stoutly opposes this demand.

EU and Japan against China subsidy

Other major powers -- including the 15-nation European Union and Japan -- are also against granting China such leeway, although they recognize that it would involve such huge sums that Beijing was unlikely to be able to afford it.

Long declined to discuss the Chinese response to the U.S. proposals, believed to have suggested a farm subsidy level of between seven and eight percent.

"Until the final outcome of negotiations, both sides have to hold their positions. Negotiations are negotiations," he said.

"I believe our response was positive. I hope it produces good results."

But Long said China would in general stick to its demand that in overall terms it be treated as a developing country in the final entry terms that have to be agreed by all 140 members of the Geneva-based WTO.

China looking to resolve EU issues soons

He said other disagreements -- one with the European Union over the access EU insurance companies would have to the Chinese market -- could be resolved soon, and declared China was ready for a quick meeting of the WTO working party on Chinese entry.

The working party, in which all WTO members can take part, has to finalize the detailed and voluminous package of entry documents and submit them to the organization's ruling General Council for final approval.

Long said Moore told him he hoped China could be a member in time for the WTO's ministerial meeting in Qatar in early November. "I told him it would be good if we were in and you get a round (of trade negotiations launched there)," Long said.

Moore is championing an effort by major powers to get agreement in Qatar to kick off a new round of multilateral trade liberalization negotiations, a project China supports although many developing countries are sceptical about it.

Reuters contributed to this report.