China threatens to block industrial goods deal at WTO
Sunday, 11 November 2007
GENEVA, Nov 10 (AFP): China has threatened to veto any proposals on cutting customs tariffs on industrial goods at the World Trade Organisation (WTO) if its requests are not met, trade sources said yesterday.
During a meeting of the negotiating group on non-agricultural market access (NAMA), China's delegate said he had received instructions from Beijing to veto any revised text put forward by group chair Don Stephenson if it "proposed flexibilities that failed to meet China's minimum requirements," the sources said.
China did not make clear what its precise requirements were, they added.
The move was seen as a bid to put pressure on the negotiations in the Doha round of trade liberalisation talks. But sources said it would be very difficult for China to veto the whole Doha package as Beijing stands to make substantial gains from a successful WTO deal.
"It could just be grandstanding," a trade source said.
"You cannot take all these things very literally," another source from a developing economy added, noting that political rhetoric is an integral part of trade negotiations.
Back in July, Stephenson, who is also Canada's ambassador to the WTO, issued draft proposals that called for a cut in industrial tariffs charged by about 30 developing nations to less than 23 per cent.
The proposals drew a large amount of criticism, particularly from the "NAMA 11" group of developing nations that views them as unfair and too generous to developed countries.
China's objections are "just another symptom" of the widespread dissatisfaction, a trade source from a developing country told the news agency.
The current text needs substantial revision or it could be blocked not just by China but a large number of countries, the source added.
For China, which is classed as a developing nation as part of its WTO accession agreement, Stephenson's proposals would mean a cut to between 6.1 and 6.5 per cent on average, from 9.0 per cent currently.
China would "not accept a provision in the new text that would be discriminatory," the sources cited the delegate as saying.
The European Union reacted sharply to the Chinese intervention, warning it could spark "political reactions" given China's weight in the world economy, the sources added.
The United States did not react directly however, they noted.
Washington's ambassador to the WTO did say earlier this week that China and other developing countries such as Brazil and India needed to demonstrate more flexibility on NAMA in order for the US administration to convince Congress to approve any final deal.
"If China, Brazil, South Africa, Argentina, India and others are not making reasonable contributions, then we won't be able to make that demonstration," ambassador Peter Allgeier told newsmen in an interview.
Many countries will not even consider talks on the NAMA coefficient-the formula which determines by how much tariffs will be cut-before a deal is reached on agriculture or even before a ministerial meeting, sources said.
However, developing economies such as the EU and US deem NAMA equally important for a successful overall round.
"There won't be any round without a substantial, meaningful result in NAMA," sources cited the EU representative as saying.
Three weeks of intensive talks have failed to yield substantial progress, prompting Stephenson to warn members they were "condemned to continue this dialogue."
Developing and emerging nations in the six-year-old Doha round of trade talks are seeking cuts in rich country subsidies and in import tariffs for agricultural produce. Developed nations want better access to industrial markets in poorer economies in return.
Meanwhile, Brazil and Canada have both renewed their complaints against agricultural subsidies by the United States, the WTO said yesterday.
Both countries have requested that their complaints be heard at the next meeting of the WTO's dispute settlement body (DSB) on November 19, according to the latest DSB agenda.
Canada first requested DSB mediation over its complaint in June. This was blocked by the US, as is its right under WTO rules, but a second request will automatically see the panel adopt the complaint.
Brazil meanwhile filed its complaint in July. Since then it has been involved in bilateral discussions with the United States, but as these have yet to yield any progress, it is lodging a first panel request at the DSB.
Canada claims Washington violated WTO commitments on subsidies to a wide variety of crops including corn, wheat, soybeans, sugar, peas and beans.
During a meeting of the negotiating group on non-agricultural market access (NAMA), China's delegate said he had received instructions from Beijing to veto any revised text put forward by group chair Don Stephenson if it "proposed flexibilities that failed to meet China's minimum requirements," the sources said.
China did not make clear what its precise requirements were, they added.
The move was seen as a bid to put pressure on the negotiations in the Doha round of trade liberalisation talks. But sources said it would be very difficult for China to veto the whole Doha package as Beijing stands to make substantial gains from a successful WTO deal.
"It could just be grandstanding," a trade source said.
"You cannot take all these things very literally," another source from a developing economy added, noting that political rhetoric is an integral part of trade negotiations.
Back in July, Stephenson, who is also Canada's ambassador to the WTO, issued draft proposals that called for a cut in industrial tariffs charged by about 30 developing nations to less than 23 per cent.
The proposals drew a large amount of criticism, particularly from the "NAMA 11" group of developing nations that views them as unfair and too generous to developed countries.
China's objections are "just another symptom" of the widespread dissatisfaction, a trade source from a developing country told the news agency.
The current text needs substantial revision or it could be blocked not just by China but a large number of countries, the source added.
For China, which is classed as a developing nation as part of its WTO accession agreement, Stephenson's proposals would mean a cut to between 6.1 and 6.5 per cent on average, from 9.0 per cent currently.
China would "not accept a provision in the new text that would be discriminatory," the sources cited the delegate as saying.
The European Union reacted sharply to the Chinese intervention, warning it could spark "political reactions" given China's weight in the world economy, the sources added.
The United States did not react directly however, they noted.
Washington's ambassador to the WTO did say earlier this week that China and other developing countries such as Brazil and India needed to demonstrate more flexibility on NAMA in order for the US administration to convince Congress to approve any final deal.
"If China, Brazil, South Africa, Argentina, India and others are not making reasonable contributions, then we won't be able to make that demonstration," ambassador Peter Allgeier told newsmen in an interview.
Many countries will not even consider talks on the NAMA coefficient-the formula which determines by how much tariffs will be cut-before a deal is reached on agriculture or even before a ministerial meeting, sources said.
However, developing economies such as the EU and US deem NAMA equally important for a successful overall round.
"There won't be any round without a substantial, meaningful result in NAMA," sources cited the EU representative as saying.
Three weeks of intensive talks have failed to yield substantial progress, prompting Stephenson to warn members they were "condemned to continue this dialogue."
Developing and emerging nations in the six-year-old Doha round of trade talks are seeking cuts in rich country subsidies and in import tariffs for agricultural produce. Developed nations want better access to industrial markets in poorer economies in return.
Meanwhile, Brazil and Canada have both renewed their complaints against agricultural subsidies by the United States, the WTO said yesterday.
Both countries have requested that their complaints be heard at the next meeting of the WTO's dispute settlement body (DSB) on November 19, according to the latest DSB agenda.
Canada first requested DSB mediation over its complaint in June. This was blocked by the US, as is its right under WTO rules, but a second request will automatically see the panel adopt the complaint.
Brazil meanwhile filed its complaint in July. Since then it has been involved in bilateral discussions with the United States, but as these have yet to yield any progress, it is lodging a first panel request at the DSB.
Canada claims Washington violated WTO commitments on subsidies to a wide variety of crops including corn, wheat, soybeans, sugar, peas and beans.