China edged a step closer to joining the World Trade Organisation (WTO) yesterday with the announcement that America is set to renew normal trade relations with the country.
President Bush confirmed he would ask Congress to renew the normal trade status, which allows Chinese exports into the US at the same low tariffs as goods from most countries.
Congress approved "permanent normal trade relations" (PNTR) status for China last year, but it was contingent on Beijing joining WTO.
Analysts yesterday predicted the move would improve relations between the two countries which have been seriously strained in recent months, particularly over the spy plane incident.
Mr Yiping Huang, vice-president for Asia-Pacific economic and market analysis for Salomon Smith Barney in Hong Kong, said if the US pushed hard on the WTO issue it would be received favourably in Beijing. "Nobody expected Bush to walk away from normal trade relations or WTO," Mr Huang said.
China's Foreign Trade Minister, Mr Shi Guangsheng, and the new US Trade Representative, Mr Robert Zoellick, will meet for the first time next week at an Asia-Pacific Economic Co-operation (APEC) gathering in Shanghai.
The bilateral meeting has raised hopes the two sides can iron out the differences delaying China's WTO accession. The main sticking point is the level of agricultural subsidies China pays farmers.
The US is insisting that China be classified as a developed country, allowing farm subsidies of just 5 per cent of the value of total production. But China says it is entitled to pay subsidies of 10 per cent as a developing country.
As well as hosting APEC trade ministers, China will also host a meeting of APEC leaders in Shanghai in October which will be attended by President Bush.
China's entry to WTO is expected to be delayed until at least late this year or early next year.
Congress is expected to approve the trade status tomorrow, but may take the opportunity to criticise China's human rights record and other policies dividing the two countries. After the trade status for China is certified, Congress can call a vote to overturn it within 30 days.
