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China promises not to hit at British firms

CHINA has made 'absolute unequivocal assurances' that it would not discriminate against any European Union country on political grounds, Sir Leon Brittan, EU trade commissioner, said yesterday in Peking. To comply with such a commitment, however, Peking would have to withdraw its threats that Sino-British economic and trade relations would suffer because of the row over political reform in Hong Kong.

Sir Leon said that he had been told three times in Peking 'at a very high level' that there would be no discrimination. He would not name those who made the pledge, but his most important meetings have been with Li Lanqing, Deputy Premier, Jiang Enzhu, Deputy Foreign Minister, and Wu Yi, Minister of Foreign Trade and Economic Co-operation. He said he had gone through the issues 'very carefully and at considerable length'.

He would not comment on China's past actions, such as discriminating against French firms because of France's arms sales to Taiwan, but added: 'Of course, we will watch the situation as it develops.' Asked if he would make the same point to Malaysia about discrimination, Sir Leon said: 'Well, I am in China, not in Malaysia. And the context was one in which we were talking about (China's) entry to the Gatt (General Agreement on Tariffs and Trade), so I haven't really anything to say on the question of Malaysia. If a member state takes the point up in that sort of way we would have to look at the nature of the EU's relationship with Malaysia and see what the situation was.'

Western diplomats were sceptical yesterday whether China would drop its threat to British trade interests, especially with the National People's Congress due to start next week. But Sir Leon said China understood that the principle of non-discrimination was fundamental to Gatt. He accepted that Ms Wu, who spoke of the damage to trade relations, was only 'joking' when she said Sir Leon, as a Briton, was particularly interested in the issue.

Sir Leon said he had raised the question of human rights but that the EU believed the questions of human rights and China's Gatt re-entry should be treated separately. He said China had found 'acceptable' an EU protocol outlining an approach to Gatt membership of negotiating substantial liberalisation while phasing in the commitments. The benefits for European firms would be substantial: tariff reductions and increased access.

China wants to join a world trade body planned for 1995. 'China will not be able to do all the things that we want by that date, but could commit itself to do them within an agreed time-scale by that date,' said Sir Leon.