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Chinese and EU Negotiators Fail to Reach WTO Agreement

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BERNARD SHAW, CNN ANCHOR: China suffered a setback Friday in its effort to join the World Trade Organization. Talks with the European Union ended without an agreement.

Our CNN Beijing bureau chief Rebecca MacKinnon reports.

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REBECCA MACKINNON, CNN CORRESPONDENT (voice-over): When European and Chinese trade negotiators sat down to hash out a bilateral deal on China's entry into the World Trade Organization, European Trade Commissioner Pascal Lamy said he didn't think it would be easy.

PASCAL LAMY, EUROPEAN TRADE NEGOTIATOR: We have a number of items on which we have to work hard.

MACKINNON: Four days of hard work was not enough. Lamy was already on his way to the airport as his spokesman read a statement.

ANTHONY GOOCH, EUROPEAN UNION SPOKESMAN: Although the four days of talks were held in a constructive spirit, with positive movement on both sides resulting in a certain narrowing of differences on the outstanding issues under negotiation, conclusion of a bilateral agreement was not possible at this stage.

MACKINNON: China and the United States signed a WTO access agreement last November, which European negotiators say covered only 80 percent of European interests. What's left? European businesses say they need better access to China's telecommunications, automobile, and insurance markets. Observers say Chinese negotiators may have underestimated Europe's resolve.

JORG WUTTKE, CHINA-EU CHAMBER OF COMMERCE: They were under the impression that China can get just basically the European countries lined up, just as the U.S. signed in November, so Europe is an easy deal. And I think they might have misjudged the situation there.

MACKINNON (on camera): Lamy now plans to brief the 15 European member states and the European parliament, and set a strategy for future talks. He says he's committed to getting China into the World Trade Organization, but as he made clear today, he's not prepared to do so at all costs.

Rebecca MacKinnon, CNN, Beijing. (END VIDEOTAPE)

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