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China economy status deal might help EU

(Reuters)
Updated: 2006-11-14 09:25

The European Union could gain from eventually negotiating a deal to give China market economy status (MES), Europe's trade chief said.

China has so far complied with only one of five EU criteria needed to gain MES.

EU Trade Commissioner Peter Mandelson, who visited China last week, said on Monday the country was making some progress on the other four -- including adopting international accounting and bankruptcy standards -- although there was no immediate possibility of granting the status to China.

But in 10 years time China will automatically get MES under the terms of its World Trade Organisation accession in 2001.

"We will have to reach a judgment in due course about how legitimate it is to continue to withhold such a status which China will get in any case ... and it might be preferable to negotiate some advantages for European economic interests along the way," Mandelson told a conference on trade policy.

Brussels and Beijing are due to launch talks in January for a wide-ranging agreement covering political and economic issues.

The EU wants to China to open up further its fast-growing economy, creating opportunities for European companies.

But several European governments have complained their manufacturing industries are under threat from unfair competition from China.