China dropping trade barriers

Associated Press

SHANGHAI, China — Punctuating its support for efforts to launch a new round of global trade talks, China announced Friday it had abolished dozens of rules and regulations affecting a broad swath of its economy.

Going into the annual summit of Asia-Pacific leaders this weekend in Shanghai, officials have portrayed the push for freer trade as one of the most important antidotes to the economic downturn that has accelerated following the Sept. 11 terrorist attacks in the United States.

But while Chinese and other Pacific Rim leaders are casting a vote for free trade with a unanimous call for launching a new round of talks at next month’s World Trade Organization meeting, European Union officials in Brussels rejected the latest draft agenda. The proposed agenda was released last month by the WTO.

Post-Sept. 11 solidarity goes only so far in overriding longstanding differences over thorny trade issues.

EU Agricultural Commissioner Franz Fischler on Thursday called the proposed agenda — a last-stab attempt to bridge gaps between the 142 WTO members — "a brave effort."

However, Fischler said EU members could not accept a reference to phasing out farm subsidies. Trying to define the outcome of trade talks in advance caused the failure of trade talks in 1999 in Seattle, where anti-globalization protesters rampaged in the streets, he contended.

Western demands for the inclusion of labor rights and environmental protection in the agenda have also proved divisive, with poor nations saying they need time before they can hope to meet standards that took years to develop in wealthier countries.

Ahead of next month’s WTO meeting, rich nations say they have become more accommodating, and at least some Third World trade ministers have acknowledged as much.

But developing nations, including APEC members Malaysia and Thailand, have expressed concerns about committing to new talks before they can first be satisfied with the scope of the agenda.

China has used the occasion of the annual APEC summit — being held in the glitzy new Pudong financial district — to showcase its own efforts to prepare for WTO entry and its achievements in opening and modernizing its economy.

In a notice dated Oct. 6 but not published until Friday, the State Council, China’s Cabinet, said it had repealed 71 rules that conflict with new government policies and another 80 regulations that were due to expire, the official Xinhua News Agency reported.

The rules that were scrapped "no longer comply with China’s socialist market economic system and the new situation of its imminent accession into the WTO," Xinhua said.

Among the things the council abolished were tax exemptions for companies operating in special economic zones and rules that regulated foreign joint ventures — which will be able to operate much more freely after China implements its WTO commitments. It also lifted restrictions on insurance, banking and transport.

In a sign of the huge impact WTO entry will have on domestic companies, the notice repealed several measures regulating the business operations of local firms, from big state-owned enterprises down to companies run by farmers. The WTO regime is expected to be a big shock for China’s long-protected farmers and inefficient state factories.

China is expected to complete the bureaucratic steps leading to formal WTO entry by the end of this year or early next year.

Copyright ©2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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