U.S., China Reach Final Agreement

June 12, 2001

The United States and China have reached consensus on remaining bilateral concerns related to China's World Trade Organization accession, including agricultural issues. The agreement indicates that both countries plan to work together in Geneva to complete China's WTO accession. In addition, both countries will work closely with other WTO members to build on the consensus reached by the United States and China this past week in Shanghai.

"This understanding is a win-win result for China and the U.S. It should help us and the other nations of the WTO to try to complete China's accession this year," said U.S. Trade Representative Robert B. Zoellick. "China is clearly on the way into the WTO, and a strong supporter of the new WTO round. In addition this progress should add momentum to our efforts to launch a new global round of trade negotiations in Doha this November."

"I am pleased to build on the accomplishments of my predecessor, Ambassador Charlene Barshefsky, who worked for many months to achieve the bilateral accord in November 1999," Zoellick said.

The U.S.-China bilateral negotiations were held during the Asia-Pacific Economic Cooperation (APEC) Meeting of Ministers Responsible for Trade, held in Shanghai. Issues discussed between the United States and China were: domestic support for agriculture; many services, such as distribution and retail business; and, trading rights.

Sen. Charles Grassley (R-IA) noted that the farm subsidy issue was "the major outstanding area of disagreement" between China and the United States that had stopped progress on Geneva negotiations in the WTO. "The agreement on farm subsidies reached by the United States and China in Shanghai early Saturday is a good deal for Iowa's farmers, and for American agriculture. The longer the impasse over how much China could subsidize its farm sector dragged on, the more I was concerned that Iowa's corn and soybean farmers, as well as our pork producers, might have to wait a long time to take advantage of the agricultural market access and tariff reduction commitments that China made to the United States in 1999."

Grassley added, "When this deal is eventually affirmed by other World Trade Organization member countries later this month in Geneva, China will be on track to join the WTO at theWTO Ministerial this November. When it finally joins the 141-member WTO, China will, for the first time in its history, be part of a global, rules-based trading system that is committed to promoting predictable, open and fair competition."

Once China joins the WTO, it will immediately implement a bound tariff rate of 3% on soybeans. It will eliminate tariff rate quotas on soybean oil by 2006. And it will reduce its tariff on pork from 20% to 12%. "This is exceptionally good news for Iowa's export-oriented farmers and pork producers. And it will be an extremely favorable development for America, and through the peaceful settlement of trade disputes, for the overall prospects of peace in the world."