- The Washington Times - Sunday, November 11, 2001

DOHA, Qatar The World Trade Organization yesterday gave the historic final go-ahead for China to join the group, a step that forces Beijing to open its markets to foreign companies and promises dramatic change for the unwieldy 142-member body.
Capping 15 years of stop-and-go negotiations, the WTO approved China's accession at a meeting in the Persian Gulf emirate of Qatar with rousing applause for Chinese Trade Minister Shi Guangsheng.
It "will have a far-reaching impact on the Chinese economy and the world economy in the new century," said Mr. Shi, who hugged WTO Director-General Michael Moore during the ceremony.
Packs of diplomats and journalists huddled around closed-circuit televisions as Mr. Shi gave his inaugural speech before WTO members assembled in the Qatari capital of Doha until Tuesday to discuss further liberalizing global commerce.
The United States, which waged a concerted campaign to get China to open its markets before joining the WTO, is wagering that the Asian giant will promote freer markets, U.S. officials said.
But U.S. officials and trade analysts who follow China say the reality will be much more complex, with Chinese diplomats alternately supporting and opposing U.S. objectives.
"How the organization deals with the rise of China as a major trading country will be most interesting to watch," said Nicholas Lardy, a China analyst with the Brookings Institution.
China ranks as the seventh-largest trading nation. It exported goods worth $249 billion last year, while its imports totaled $225 billion.
WTO membership will also draw China closer to Taiwan, which will get the green light from the organization today as part of a carefully choreographed process to usher both into the WTO at the same time.
U.S. Trade Representative Robert Zoellick said Mr. Shi backed the U.S. push for a new round of trade talks during a major meeting in Shanghai in October.
"It helped influence the attitudes of other countries throughout the region," said Mr. Zoellick.
In particular, the United States hopes China's influence will help persuade poorer countries to open their markets faster, a U.S. trade official said. Though not a rich country on par with the United States, China has agreed to liberalize its trade much faster than countries such as India or Korea.
As a result, the United States believes China will show a strong interest in bringing the developing world up to its level quickly, said the U.S. official.
But Mr. Shi also put the United States on notice that China, with its very low per capita income, also sees itself as a defender of poorer countries.
A challenge to the leadership of the United States and the 15-nation European Union also awaits the WTO when China joins, diplomats said.
The trans-Atlantic link, especially under the direction of Mr. Zoellick and his close friend, Pascal Lamy, Europe's trade commissioner, has driven action in the trade body. There is no U.N.-style security council to speed decision-making in the WTO.
But it will soon become impossible to work around China to advance WTO talks, observers said.
"Within a few years, [this U.S.-European] arrangement will probably crumble," said Mr. Lardy.
Additionally, the United States and Europe face numerous trade spats with China in the WTO's legalistic dispute-settlement procedures.
China signed up to complex trade rules as part of its membership and must lift many restrictions on foreign companies or face suits in the WTO. The Americans and Europeans have a track record of vigorously challenging unfulfilled WTO commitments, Mr. Lardy noted.
Trade economics may also bring China and Taiwan closer together even as the two countries wrestle over China's claim that Taiwan is a renegade province, and that only the mainland can represent China.
Two-way trade between Taipei and the mainland hit $31 billion last year, and Taiwanese companies have invested about $60 billion in China. The more generous WTO rules on investment will accelerate this trend, observers said.
WTO members need not be sovereign nations to join, only "separate customs territories," a technicality that also allows Hong Kong to belong to the WTO.
At the same time, China will face Taiwan as an equal in WTO trade disputes, just as it deals with other members.
"Otherwise, the Chinese will undermine their international credibility," Mr. Lardy said.
A U.S. official speculated that China and Taiwan will avoid direct confrontation in the WTO, preferring instead quiet diplomacy to resolve commercial questions.


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