Spy plane standoff put China's WTO entry at risk
HONG KONG, China (CNN) -- Experts are warning an extended dispute over the U.S. spy plane and its crew may prevent China's entry into the World Trade Organization this year.
They are encouraging a fast resolution to the dispute, which began four days ago when a U.S. surveillance plane and a Chinese fighter jet collided near Hainan Island forcing the American spy plane to make an emergency landing.
The Chinese pilot is still missing in the South China Sea, and 24 crew members of the U.S. spy plane remain in detention in China.
China blames the U.S. for the incident, and on Wednesday president Jiang Zemin repeated his demands for an apology.
Dr. Eden Woon, a former China policy advisor for the United States secretary of defense and the current director of the Hong Kong General Chamber of Commerce, told CNN the confrontation threatened to jeopardize China's scheduled WTO entry later this year.
In order to ensure China's WTO accession, he said the issue needed to be resolved swiftly.
Given the Chinese president's repeated demands for the U.S. to apologize for Sunday's mid-air collision, Woon said Washington should offer some form of sympathy for the missing pilot while not apportioning any blame for the collision, which it officially describes as an accident.
Woon added China should also release the 24 crew members of the U.S. Navy EP-3E Aries II, suggesting such an act would immediately defuse the situation and allow quieter diplomatic discussions to smooth over relations between the two nations.
Woon's warning came as Britain waded into the debate for the first time, with foreign secretary Robin Cook urging China to return the U.S. spy plane and its crew, and suggesting an apology from the U.S. would be unrealistic.
Hong Kong-based economist with the Bank of America, Frank Gong told CNN the risk of a prolonged standoff was very high, as it appeared "hard liners are running the show" on both sides.
He said such a situation would have “huge implications” for north Asian economies, in particular Hong Kong and Taiwan.
"I think somehow if the relationship deteriorates and the chances are high then we will not see China's entry into the WTO by the end of the year," Gong said.
The president of the U.S. China Business Council, Robert Kapp, echoed concerns by the U.S. ambassador to China, admiral Joseph Prueher, that the incident had the potential "to bleed" into broader issues of China-U.S. relations.
Something much larger
"Time is not on our side. If this is not managed maturely and quickly by both sides and if the crew is not on its way home I think very, very soon then there is the possibility that this disagreement will metastasize into something much larger," he said.
Kapp said although a degradation of relations had not yet occurred it was not good for regional security and stability at a time when U.S. companies were anticipating more stability and predictability due to China's anticipated entry into the WTO.
China has been trying to join the global trade body for 15 years. Its entry is expected to fuel much greater trade between its massive internal markets and Western trading partners, but in recent months China's subsidies to farmers have proved a sticking point with several key nations, including the U.S..
"When the United States accidentally destroyed China's embassy in Belgrade in the spring of '99 the negotiations that were about to resume between the two counties on the WTO accession were iced, and they remained iced until September when they resumed and led very quickly to final agreement between the two countries,” Kapp said.
He said there was no sign yet that WTO negotiations slated for the second half of April in Geneva would be delayed.
Frank Gong from the Bank of America said the annual vote by the United State congress on normal trading relations for China on June 3 was definitely at risk as well.
He said the longer the standoff between the U.S. and China dragged on the worse the outcome of the vote would be.
He said the looming issue of U.S. arms sales to Taiwan threatened to further antagonize the situation, and warned that economic and political relations between the U.S. and China could easily go into a tailspin.
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