China Just Doesn’t Get It

The latest round of international trade talks aimed at qualifying China for membership in the World Trade Organization is at an impasse. Beijing’s piecemeal approach to addressing trade problems falls far short of what the United States wants, which is a comprehensive framework for opening Chinese markets and scrapping government subsidies.

Unless Beijing accedes to world trading rules, the international stature it covets will be elusive and Chinese President Jiang Zemin’s visit this fall to Washington will be mostly symbolic.

At the long-running trade talks, which continue next month, Chinese officials put the best face on the negotiations. They also tried to make an end run by issuing a statement in Geneva that U.S. Trade Representative Charlene Barshefsky would visit Beijing soon--a move that would signal a breakthrough in talks. But Barshefsky said she was not planning a trip and that Beijing was “essentially nonresponsive” to U.S. concerns on many issues.

For example, China will not open its market to services by foreign companies or provide a detailed plan to remove barriers on agricultural products. Instead, the government offered selective concessions, such as eliminating quotas on cars in eight instead of 15 years and phasing out other quotas. These are not enough.

China also wants to be classified as a developing nation for entry to the WTO, a designation that would entitle it to a number of exemptions and exceptions to international trading and tariff rules. But its world exports totaled $148.8 billion in 1995 and its gross domestic product is the world’s third-largest. U.S. exports to China have been flat at $12 billion since 1995 while Chinese exports to the U.S. have grown to $51 billion. Bringing China in line with international trading standards would help correct this imbalance for the United States and other countries.