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Understanding the U.S.-China World Trade Organization Agreement

Strategic Insights

— 1 min read

Premier Zhu Rongji's recent visit to Colorado demonstrated the growing interest in the U.S.-China relationship. However, the negotiations leading to the World Trade Organization agreement were contentious and strained the relationship between the two countries. To comprehensively understand the agreement's terms and its implications for long-term U.S.-China relationships, it is essential to examine the key takeaways from the negotiations and the benefits for Colorado.

Key Takeaways:

  • The World Trade Organization agreement covers a wide range of areas, including computers, telecommunications, agriculture, travel and tourism, motion pictures, wood and paper, distribution rights, autos, and banking.
  • Average tariff levels were cut from 22.1 percent to 17 percent, and agricultural tariffs were reduced from an average of 31.5 percent to 14.5 percent.
  • Export subsidies were eliminated, and telecommunication companies are allowed a 50 percent ownership position two years from entry.
  • The agreement provides many opportunities for Colorado in the dynamic Chinese market, including increased exports of manufactured products ($376.9 million) and agricultural products ($32.5 million) in 1998.
  • Colorado is China's fourth-largest export market, with exports totaling $409.4 million to China and Hong Kong in 1998.
  • Exports to China grew 246 percent from 1993 to 1998, showcasing the significant potential for trade between the two countries.

Statistics:

  • $409.4 million: Total exports to China and Hong Kong in 1998
  • $376.9 million: Total manufactured products exported to China in 1998
  • $32.5 million: Total agricultural products exported to China in 1998
  • 246 percent: Growth in exports to China from 1993 to 1998
  • 22.1 percent: Average tariff level before the World Trade Organization agreement
  • 17 percent: Average tariff level after the World Trade Organization agreement
  • 31.5 percent: Average agricultural tariff before the World Trade Organization agreement
  • 14.5 percent: Average agricultural tariff after the World Trade Organization agreement

Sources:

  • Premier Zhu Rongji's Colorado speeches
  • Colorado International Trade Office reports
  • World Trade Organization agreement
  • President Clinton's rejection of trade concessions offered by Premier Zhu Rongji during his U.S. visit in April

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