The deal on China's entry to the World Trade Organisation (WTO) has sidestepped a dispute on insurance, industry officials and diplomats said today.
On Monday, a WTO working party approved terms China had negotiated to enter the world trade body after 15 years of talks, clearing the way for membership by the end of this year.
But the final agreement failed to resolve contradictions between the United States and the European Union (EU) over insurance, meaning the issue would probably have to be handled later by WTO arbitration, industry officials said.
At the heart of the dispute is US insurance giant American International Group (AIG), the first foreign insurer to enter the Chinese market in 1992.
China has allowed AIG 100 per cent ownership of four life insurance joint ventures, the only foreign company with such a privilege.
AIG and US negotiators have pushed for the company to continue to enjoy the advantage for both existing and new operations after China's entry to the WTO. They said that was allowed under the grandfather clause of a bilateral agreement.
That has angered European and other US insurance firms, who argue it gives AIG an unfair advantage that runs counter to the rules of the WTO.
In the end, negotiators put aside the dispute in the interest of getting China into WTO, industry officials and diplomats said.