NVDA Q3 Earnings Alert: Why our AI stock picker is still holding Nvidia stockRead More

INTERVIEW-UPDATE 1-China sees big global benefits from Doha

Published 12/01/2009, 08:58 AM
Updated 12/01/2009, 09:03 AM

* WTO deal difficult by 2010, must serve poor countries

* China does not want high profile, big role in trade talks

* China open to voluntary participation in WTO sector deals

(Adds details, background, quotes)

By Jonathan Lynn

GENEVA, Dec 1 (Reuters) - A deal to liberalise commerce in the World Trade Organisation's Doha round would boost the global economy by $500 billion, Chinese Commerce Minister Chen Deming said on Tuesday.

China supports the goal set by world leaders of completing the Doha round by 2010, Chen told Reuters.

But doing so will be difficult if other countries want to reopen what has already been agreed in the eight-year-old talks, he said in an apparent reference to the United States.

The United States says the previous approach failed to deliver agreement, and the negotiations need to be broadened and pursued in new formats. In particular Washington wants big emerging countries like China to open their markets more to produce a deal that can be sold to U.S. voters.

But Chen -- who is not meeting his U.S. counterpart Ron Kirk during the WTO conference they are both attending -- said a deal must meet developing-country needs, in line with the development mandate agreed when talks were launched in late 2001.

"If we are to overturn what has been already agreed and reopen the entire negotiations then the chances of reaching an agreement or reaching a conclusion will be gone," he said, speaking through an interpreter.

NO HIGH PROFILE

Economists' estimates of the benefits that a Doha deal would provide by cutting farm and industrial tariffs and agricultural subsidies, opening trade in services and helping poor countries trade more, vary widely.

Chen's estimate may have been based on research by the Peterson Institute for International Economics in Washington this summer. A study on Monday from the International Food Policy Research Institute put the gains at only $70 billion.

Benefits will ultimately depend on how far countries open up their markets, but Chen rejected calls by the United States and other countries for China to show "leadership" -- diplomatic parlance for taking unpleasant decisions.

China is still a developing country, with over 50 million people in poverty, and despite its fearsome export reputation, most of the goods it sells are still low-value labour-intensive products, he said.

Although China was already the world's second biggest exporter in 2008, Chen said its exports accounted for only 8.9 percent of the world total, while with 1.3 billion people it has 19 percent of the world's population.

"How can we turn a development round into a round where the interests of some major developed members are reflected whereas the interests of the developing members are not?" he asked.

Rather than taking a high profile in trade talks, China preferred to pursue its goals by working through various developing country alliances, he said.

On one of the most sensitive issues in the Doha talks -- Washington's call for big emerging countries to take part in deals that would eliminate duties in some industrial sectors such as chemicals, Chen said China was open to discussion.

But participation had to be voluntary and the negotiations should take place after an outline agreement had been reached in the core agriculture and industrial goods areas, he said.

Current proposals would see China's average tariff on industrial goods fall to 6 percent from 8.9 percent under Doha, a major contribution to the world economy on the roughly $1 trillion of goods China imports.

China's trade surplus will fall this year to less than $200 billion from $290 billion last year, Chen said, under the impact of Chinese stimulus measures and falling world demand.

While foreign trade -- both exports and imports -- would rebound next year, the level would still be lower than in 2008.

Chen rejected calls for China to allow the yuan to appreciate to help reduce its trade surplus, echoing Monday's statement by Premier Wen Jiabao that China would take its own gradual steps on the currency but wanted to keep it stable.

Chen said the exchange rate was not the fundamental factor in trade, and China's surplus with the United States reflected strong consumer demand there. He called on Washington to relax its export controls on trade with China to sell more. (Editing by Tim Pearce)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.