The second phase of the negotiation was from 1993 to November, 1999 when the agreement was reached wi th the USA. During this second phase, we focused on opening up the market. Opening up the market was a very sensitive thing, not only for China, but for all the countries in the world. It was, and it is n ow, a very sensitive thing to open up the native ma rket and let in foreign products and services. B ut after six years of negotiations, China had reali zed that opening up the market did not mean making concessions all the time. Opening up the market, to a certain degree, was not concession, but progressi on. This was what we discovered after six years' ha rd negotiations. WTO accession negotiation, especia lly negotiation concerning opening up the market, w as extremely hard and complicated.
It was complicated because, theoretically speakin g, if China wanted to be a member of WTO, China had to reach an agreement with each of over 100 member countries in terms of market access. It was solved by bilateral negotiation rather than multilateral n egotiation. Each country had different economic structure and product mix and each country had diff erent concern, so you had to tackle the concerns of each country one by one through bilateral negotiati on so as to solve specific problems. With regard to the negotiation with each country, it was easier wi th some countries while complicated with others. Take Iceland for example. There is hardly an automo bile or manufacturing industry and its polar indust ry is fishing. Because this country is located in t he Arctic Ocean, its polar industry is fishing in t he Arctic Ocean. Therefore, the negotiation with Ic eland was quite easy, because the requirement of th e Iceland delegation was very simple: As long as yo u reduce the import tariff of fish from Arctic Ocea n, we can reach an agreement. We were aware that as we are very far away from Iceland and the cost for fishing in the Arctic Ocean is very high, it would not influence our industry much. I remember we h ad a pleasant negotiation with the Iceland delegati on. It was a sunny morning in Geneva and we sat in a café. I was very happy because I had got full aut horization from the central government that I could say yes to the fish tariff reduction and there was no need to negotiate. But I could not immediately s ay “OK, I agree with all your five conditions” and then end the negotiation within three minutes. So I spent some time talking about Iceland and about the weather in Geneva. After 15 minutes, we got down to business and reached an agreement very soon. It was a really pleasant experience.
Negotiations with some other countries were also quite easy. For example, Columbia was really concerned with only two things. One is coffee. As we know Columbia is famous for its coffee, and its coffee production is also very large. The other is flower. The flowers produced in Columbia are really nice. We thought these two things would not pose big problem for China. As coffee is only produced in Hainan and Yunnan in China in small amount, we thought it would make no harm if we import more coffee from Columbia. Furthermore, although we Chinese had been drinking coffee for quite a long history, there were not too many coffee drinkers. Maybe you people who are doing “foreign studies” like drinking some coffee, but as for me, I still don't like it although I have been dealing with foreigners all my life. For many Chinese people, coffee makes no good drink. We Chinese people prefer to drink green tea, or Wulong tea. So I thought coffee import from Columbia wouldn't influence our own industries too much. As for the flowers, we considered that no matter how competitive Columbia flowers are, since Columbia is in Latin America, the flowers would not be fresh enough after traveling such a long distance. So we did not regard it as great threat to our own industry as well. Therefore, the negotiation with Columbia went on quite smoothly. Looking back, those were really interesting experiences to negotiate with every country.
Of course, the most difficult negotiation was that with the USA. The USA was really strong and tough in GATT and WTO. Both China and the USA delegations took a while to get used to each other. For example, whenever the USA delegation started a negotiation, they would say: “We United States of America have conditions 1, 2, 3, 4, 5 and there is no room for negotiation.” They usually did this at the very beginning. We were no exception when we began to negotiate with them. We could not accept this kind of attitude. If we have to accept all these terms and conditions, what is the point of negotiating? Why don't you just give a list and we sign “YES”? So at the very beginning, there was no substantive negotiation between us. It was just kind of “attitude negotiation”. I am from Hunan and I have a hot temper. We could not accept the USA delegation's attitude. I stroke the table for a lot of times. I remember afterwards when the US Secretary of Commerce met Wu Yi, he said to her: “I hope this negotiator of yours do not strike the table too many times.” I thought, if I did not strike the table, you Americans would not have realized they should take a different attitude when negotiating with the Chinese. So after two or three years of negotiations, the Americans knew the Chinese case was not so easy to crack.
And they were really very bossy in many issues. For example, on tariff reduction for commodities, the USA was quite the opposite to Columbia and Iceland, which just had a few as I mentioned. There were more than 6,000 commodities on the tariff list for China to cut the import tariff. Yet, the USA delegation said: “We are not Iceland. Among these 6,000 commodities, we want to negotiate with you about 4,800 items.” It was quite overwhelming for this declaration. We felt a great pressure. However, later on when we consulted some WTO experts, they said it was totally unreasonable for the USA delegation to ask to negotiate with us about 4,800 commodities. It was because according to WTO rules, if a country wants to negotiate the tariff of certain commodity, it has to meet either of the two conditions: the country is one of the top three producers of this commodity, or, it is among the three largest exporters of this commodity. So after careful study of the list, we discovered the USA was neither one of the three largest producers nor exporters for many items. So we deleted the items one by one and this made the US delegation understand that we Chinese were not knowing nothing. So they began to take us seriously. So you must be knowledgeable when you are negotiating with them, otherwise they will just bluff because they often get away with that. It was really difficult to negotiate with the Americans.
From 1993 to 1998, we did not make any progress. Both parties were playing Taiji. However, the Americans could afford the time, but we did not have much time to waste. We did not make any progress in the negotiation with the USA partly because of their strong attitude. But on the other hand, we must admit that inside China there were a lot of arguments going on about opening up the market. These arguments also dragged the progress of negotiation, because different departments could not reach consensus on a lot of issues.
From 1993 to 1995 and after years of communication, we began to reach some important consensus in terms of opening the market for WTO accession. I think Premier Zhu Rongji played an important role in this aspect. So after 1998, negotiation with the USA had sped up. We held intensive negotiations with the USA, particularly after it was decided that Premier Zhu would visit the USA in April, 1999. The USA delegation came to China and we went to Washington for twice or even three times in a month. When Premier Zhu visited the USA in April that year, we had generally reached agreement upon many important issues.