The Sino-U.S. WTO Accesssion Agreement

The full text of a Sino-U.S. Trade Deal signed last November was made public Tuesday, March 14, 2000. The agreement is part of the terms of China's planned accession to the World Trade Organization later this year. The following exerpts were taken from a Reuters wire report:

• China will eliminate tariffs on products such as computers, semiconductors and related products by 2005.

• Chinese duties for agricultural products will fall from 22 percent to 17.5 percent. On U.S. priority agricultural products, tariffs will drop from an average of 31 percent to 14 percent by January 2004, with even sharper drops for beef, poultry, pork, cheese, and other commodities.

• China agreed to cut tariffs from an average of 24.6 percent to an average of 9.4 percent overall and 7.1 percent on U.S. priority products. Industrial tariffs on U.S. products will fall from an average of 24.6 percent in 1997 to an average of 9.4 percent by 2005.

• In the auto sector, China will cut tariffs from the current 80 to 100 percent level to 25 percent by mid-2006, with the largest cuts in the first years after accession to the WTO. Auto parts tariffs will be cut to an average of 10 percent by mid-2006.

• China will permit a 50 percent foreign equity share for value-added and paging services two years after accession, a 49 percent foreign equity share for mobile voice and data services five years after accession, and for domestic and international services six years after accession.

• China agreed to allow 50 percent ownership for life insurance. Life insurers may also choose their own joint venture partners. For nonlife, China will allow branching or 51 percent ownership on accession and wholly owned subsidiaries in two years. Reinsurance is completely open on accession.

• China has committed to full market access in five years for U.S. banks. Foreign banks will be able to conduct local currency business with Chinese enterprises starting two years after accession. Foreign banks will be able to conduct local currency business with Chinese individuals from five years after accession.

• China will permit minority foreign-owned joint ventures to engage in fund management on the same terms as Chinese firms. By three years after accession, foreign ownership of those joint ventures will be allowed to rise to 49 percent.

• Beijing will allow U.S. businesses to have their own distribution networks in China, rather than being forced to set up factories there to sell products through Chinese partners.

• China will eliminate existing quotas on accession to the WTO for the top U.S. priorities, including optic fiber cable. It will phase out remaining quotas, generally by 2002, but no later than 2005.

More detailed fact sheets on individual industries are available on the White House.gov Web site.