Talks in Beijing between the European Union and China ended in disagreement yesterday, confounding expectations that they would remove the last major obstacle to China joining the World Trade Organisation (WTO). It was the second setback this week in Beijing's 14-year pursuit of membership of the organisation, which sets the rules for global trade.
In Washington resistance to China's admission to the WTO has stiffened following Beijing's threat on Monday to use violence against Taiwan, and also by a commitment by Vice-President Al Gore to consider renegotiating some aspects of America's deal with China on WTO membership. The United States and China reached agreement last year on Beijing's admission to the WTO, with China agreeing to allow unprecedented access to foreign companies in key industrial sectors such as telecommunications and insurance. China has also signed separate trade agreements with major countries such as Japan, Canada, Australia and India, leaving only 13 economies with which to complete trade pacts of which the EU was the most significant. Last night, Chinese television insisted that the basis for an agreement had been reached with the EU, without giving any details. In the Beijing talks this week, EU officials are reported to have come prepared to request greater market access and tariff reductions than those achieved by the US, particularly in telecommunications, insurance and banking.
EU officials made some progress in the four days of talks which began on Monday but not enough to conclude a deal, according to European Commission spokesman, Mr Anthony Gooch. Expectations of a breakthrough after two days were so high that EU Trade Commissioner Pascal Lamy was on standby to fly to Beijing to sign a historic accord, but they dragged on for two days before EU officials decided to leave without any date being agreed for a resumption.
"Although some progress was made in the course of four days, not enough was made for our negotiators to believe that it was possible at this stage to reach a deal bilaterally with the Chinese. On that basis they could not recommend Commissioner Lamy to come to Beijing," Mr Gooch said.
An EU negotiator was quoted as saying that telecommunications and customs tariffs were major sticking points, and talks had not even touched upon opening the insurance and banking sectors which are of major importance to the EU. Beijing officials also refused to discuss an EU demand to raise foreign ownership in Chinese telecommunications networks beyond the 49 per cent level agreed upon with the United States in November, an EU official told Reuters, and much time was taken up discussing issues they believed had been agreed with the Chinese in Brussels last month.
In Washington, bipartisan Senate leaders said the WTO deal with Beijing could be undermined by China's threat to Taiwan and the ambivalence of Mr Gore on some aspects of the agreement, particular concerning environment and labour. With anti-China sentiment rising among Republicans, Congress is set to debate giving permanent normal trading status to China, seen as a precondition of WTO entry.
The US government expressed its "grave concern" over Monday's White Paper issued by China warning of the use of military force against Taiwan if it delayed opening talks on reunification. Beijing yesterday rejected US criticism of its White Paper as "crude interference", and said it was firmly opposed to any attempt to link it with China's bid to join the WTO. "Taiwan is purely an internal matter of China," Foreign Ministry spokesman Zhu Bangzao said.
In Taiwan an opinion poll published yesterday indicated that voters in March 18th presidential elections had not been significantly influenced by Beijing's threat of military action. Taken on Tuesday, the poll of 938 people by cable television station TVBS found public support for the three leading candidates had not changed by more than the 3 per cent margin of error since its previous survey on Sunday.
However, independent candidate James Soong, seen as "softer" on Beijing than his opponents, gained one point to lead with 26 per cent support, while pro-independence candidate Chen Shui-bian dropped one point to 25 per cent.