Diplomats say Premier Zhu is key to China's WTO entry

China and the European Union ended a one-day summit yesterday with many diplomats convinced that only the personal intervention of Chinese Premier Zhu Rongji - as happened in the past - could overcome problems delaying China's entry to the World Trade Organisation (WTO).

The EU and the US have completed 14 years of negotiations with China on the terms of its entry to the WTO, but the process is stalled by technical issues and matters of trust.

For example, China agreed to issue seven insurance licences to European companies within 60 days under the WTO deal signed with the EU in May, but granted only two by the July deadline. Chinese officials argue that EU insistence on China rewriting its trade regulations to meet WTO entry requirements constitute new conditions.

EU Trade Commissioner, Mr Pascal Lamy, who headed the EU team in negotiations with China, said last night he had clarified the issues stalling China's multilateral protocol which must be agreed by WTO members in Geneva, but offered little hope of an imminent resolution of the snags.

The summit exposed differences of emphasis between the EU Commission and President Jacques Chirac of France, which holds the EU presidency. Mr Chirac startled diplomats at the weekend by being dismissive of the technical problems, saying they could be cleared up in a matter of days. One senior EU diplomat said Mr Chirac was "out of step" with the Commission. The French President acknowledged yesterday, however, that overcoming the remaining problems might require political intervention by Premier Zhu Rongji. European Commission president Romano Prodi told a news conference that Mr Zhu "confirmed that China is committed to overcoming the last obstacles."

Mr Chirac said the EU raised China's human rights record at the summit and the "unacceptable and scandalous" trafficking in illegal immigrants from China. He presented Chinese leaders with a list of political prisoners the EU wished to see set free, though no details were provided about its length or who was on it.

Mr Prodi said China "gave some hope" it would ratify two UN conventions it signed in 1997 and 1998 on economic, social and cultural rights and on civil and political rights.

The Commission president also told reporters that European economic fundamentals were "even better than I expected" and that China had pledged to maintain the proportion of euros in its foreign exchange reserves, though the percentage of the $160 billion (€191 billion) foreign reserves held in euros was not known.

"I have good confidence with Zhu Rongji and I asked what will you do with your euro and he said, `We shall keep that and we are happy to keep that'," Mr Prodi said. The Chinese media yesterday reported favourably on the Taoiseach, Mr Ahern's meeting with Mr Zhu in Seoul on Saturday at the end of a Europe-Asia summit.

The China Daily said "Mr Zhu told the Irish leader that China is willing to join hands with Ireland in developing friendly co-operation in all fields and strengthening co-ordination in international affairs."

On Taiwan, the newspaper said, "the Chinese government appreciated Ireland's adherence to the one-China policy and its backing for China's reunification based on the one-country, two-systems principle."