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China Says No to WTO Chemical Sector Deal

September 30/2009
September, 30 (pudaily.com) -- China rejected on Monday calls from the United States and European businesses to join a pact eliminating import duties in the chemical sector as part of a global trade deal. The refusal, voiced by China"s ambassador to the World Trade Organisation, Sun Zhenyu, showed how difficult it would be to reach agreement in one of the most sensitive areas of the WTO"s long-running Doha round. ""We can"t participate in the chemical sector,"" Sun told a panel discussion at the WTO"s annual public forum. ""According to the mandate sectors are voluntary. In this case China is not so voluntary to join that one."" G20 leaders reaffirmed last week their goal of concluding the Doha round, now in its eighth year, in 2010.

But the United States has said the current deal does not create enough new opportunities for business. It wants big emerging countries like China, India and Brazil to open their markets more. A favoured option is through deals eliminating or almost eliminating tariffs in individual industrial sectors beyond any overall tariff cuts agreed in a broader agreement. But China and other big emerging countries are suspicious of efforts to force them to join sector deals, which are voluntary under the terms of the Doha negotiations. Sun linked China"s reluctance to cut tariffs further than it has already offered, or participate in sector deals, to trade measures it faces from its partners, such as this month"s increase in U.S. tariffs on Chinese tyres to block imports. ""Currently it would be very difficult for us to try to persuade our stakeholders, our industries back at home, to accept this sector at this stage,"" he said, citing anti-dumping and safeguard measures imposed on Chinese goods.

""That would be very difficult for us to explain."" Sun said China had already cut its chemical tariffs to 1.5, 5.0 and 6.5 percent in many cases and these were no longer a barrier. Rainer Quick, vice-chairman of the WTO Working Group of BusinessEurope, an EU industry lobby, said developing countries would not be expected to eliminate tariffs immediately but would have a transition period of several years before going to zero. ""We do not understand why if people say our tariffs are low that we cannot jump to the conclusion that if tariffs are low let"s get rid of them,"" he said. Sun said rich countries were refusing to take part in proposed sector deals that were of interest to developing countries, such as textiles, forestry, fisheries and electronics. But the deputy head of the U.S. mission to the WTO, David Shark, told the panel that Washington was open to all of them. ""We haven"t ruled out doing any sectorals. The discussion gets difficult as you get down to the individual sectors and in some sectors frankly there are strong differences of views among the developing countries,"" he said.

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