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AIG Urges The United States And China To Grandfather Existing Rights

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NU Online News Service, July 20, 3:45 p.m. – American International Group Inc., New York, says the World Trade Organization should protect the rights it and some other foreign companies already have in China while setting conditions for China’s entry into the WTO.

AIG is seeking an exemption from a rule that would limit foreign ownership of an insurance branch in China to 50%.

AIG set up a wholly owned subsidiary in Shanghai in 1992, and it says the United States and China agreed in 1999 to “grandfather” all existing rights acquired by foreign services companies when they reached agreement on efforts by China to enter the WTO.

“The question of whether AIG would be allowed to continue to expand its branch operations on a wholly owned basis in China was never an issue in the negotiations until the European Union attempted, in its negotiations with China, to limit such expansion,” AIG says.

“AIG has every confidence that the Bush administration will ensure that the important principle of safeguarding acquired rights is preserved in China’s final WTO accession agreement,” the company adds.

AIG started its first negotiations with the Chinese government on insurance in 1975. It has since promoted free market access for all companies, the company says.