Wholly owned United States shipping firms will be able to sell services direct to the inland China market under a landmark bilateral deal signed yesterday. The move, on the sidelines of Premier Wen Jiabao's visit to Washington, is seen as another step in the liberalisation of China's trade sector under its commitment to the World Trade Organisation and a forerunner to deals on the table with bodies such as the European Commission. Ron Widdows, chief executive of American President Lines (APL), said the move towards liberalisation would bolster Pacific trade. 'This will give further impetus to an economic partnership in what is already one of the world's fastest-growing and most important maritime trades,' Mr Widdows said. 'We also expect to see some specific benefits for foreign liner companies operating in China, with more opportunities for direct participation in operations and a better ability to manage costs.' APL was bought by Singapore's Neptune Orient Lines six years ago, but still has an American holding company and 11 vessels under the US flag. For the first time American companies, or foreign firms owning US-flagged vessels plying the mainland trades, will be allowed to sell their services direct to China's western provinces through wholly owned branch offices. They had previously been restricted to using mainland agents who charged a fee. 'It looks good because this deal will cut out 'Mr 5 per cent',' a European carrier executive said, adding a similar agreement for European firms was being vetted by the Ministry of Communications and the European Commission. 'In recent discussions on the EU-Sino maritime agreement, we were assured everything granted to the US would be offered to EU carriers,' he said. Neither the US nor China allows foreign carriers to move domestic trade. An executive from an Asian-based line said the deal would not have a great impact as carriers had been skirting the restrictions by using their logistics divisions to set up branch offices to sell direct. 'The old system has not been very convenient. But the new deal is not much of a real benefit,' he said. 'It just smooths the administrative functions.' US Secretary of Transportation Norman Minetta and China's Minister of Communications Zhang Chunxian also signed a memorandum of understanding which could waive China's surety bond requirements on US 'non-vessel owning common carriers', typically known as freight forwarders. The Federal Maritime Commission already requires these carriers to post a bond and the sides agreed to look at ways to make that suffice as a surety in both markets. With the China bond at about 800,000 yuan, this move would mainly benefit small and medium-sized enterprises. 'For the larger players, the bond is not an issue,' the European executive said.