|
||
|
TWN
Info Service on WTO and Trade Issues (Oct21/22) Geneva, 21 Oct (D. Ravi Kanth) – China has urged members of the World Trade Organization (WTO) to oppose “unilateralism and protectionism”, in what seems to be a pointed criticism against the United States that itself appears to be at the center of a panoply of protectionist trade policies. At China’s eighth trade policy review on 20 October, China’s Minister of Commerce, Mr Wang Wentao, who spoke remotely from Beijing, heralded China’s new role on protecting multilateralism, which is currently in dire straits. The need of the hour, said Mr Wentao, is to practice “true multilateralism by safeguarding a rules-based multilateral trading system that is transparent, non-discriminatory, open and inclusive, instead of setting discriminatory and exclusive standards, rules and systems, or building up barriers to trade, investment and technology.” In response to his comments, the United States, Australia, Japan, and the European Union launched what appeared to be a political broadside against China’s trade policies at the meeting. PROPOSED WTO REFORMS Commenting on the proposed WTO reforms, which is another core issue being pursued by the US, Mr Wentao said “China supports necessary reform of the WTO with the aim of improving its rules, strengthening the efficacy and authority of the multilateral trading system, and defending the development rights, interests and space of developing members.” As the US Trade Representative (USTR) Ambassador Katherine Tai and the European Union’s trade commissioner Mr Valdis Dombrovskis seem to be finalizing their positions on the MC12 issues in Brussels, including on WTO reforms, the Chinese minister has unveiled a somewhat mixed bag of trade priorities that includes the developmental issues raised by developing countries on the one side, and the simultaneous pursuit of the priorities listed by the Northern countries, on the other. “In keeping with the principle of balanced rights and obligations, China is willing to approach special and differential treatment with pragmatism and make more contributions within the WTO that is commensurate with its capacity,” Mr Wentao said. Mr Wentao underscored the need for “positive outcomes of MC12 – resumption of normal operation in the Appellate Body, conclusion of the fisheries subsidies agreement and greater cooperation against COVID-19.” Last week, the USTR Ambassador Tai rejected calls for the restoration of the Appellate Body, saying that the dispute settlement system needs a fundamental reform that seems to border on the hegemonic principle of “might is right”. At China’s trade policy review, the Chinese minister said that Beijing is seeking progress at MC12 on issues such as public stockholding programs for food security purposes, on the controversial plurilateral Joint Statement Initiatives on investment facilitation and services domestic regulation, and hopes to maintain the momentum on issues such as e-commerce, MSMEs (micro, small, and medium enterprises), women’s economic empowerment, trade and environment, and trade and health. Mr Wentao, however, appeared to remain silent on the temporary TRIPS waiver, which has been co-sponsored by 64 developing and least-developed countries. Noting that China has entered “a new development stage,” the Chinese minister said that Beijing “will embrace the development concepts and build a new paradigm to drive high quality development.” He quoted his President Xi Jinping “who has reiterated on many occasions that the new development paradigm entails more open domestic and international circulations rather than a closed domestic one.” Mr Wentao emphasized on the “Global Development Initiative” proposed by the Chinese President for a “more robust, greener and more balanced global development.” Speaking on China’s economic and trade policies during the review period and its participation in the work of the WTO, Chinese Vice Minister Mr Wang Shouwen said that “on the occasion of the 20th anniversary of China’s accession to the WTO, we would like to reiterate that China is fully committed to all-round opening up.” Mr Shouwen went on to say that “we will turn the market of China into a market for the whole world, a market to be shared by all, and a market accessible to all.” The two ministers provided a progress chart of how China has managed its trade policies and how it has become an engine for global trade despite the unilateral and discriminatory trade policies adopted by some countries. RESPONSES FROM WTO MEMBERS As expected, instead of seeking information on the specific areas of the implementation of the trade and economic policies by China over the last four years, the US, Australia, Japan, and the EU seem to have gone overboard by severely criticizing several aspects of China’s administration of its trade policies. The US delivered a rather scathing criticism of China’s trade practices. Beijing has not met the expectations members had when they brought China into the WTO 20 years ago, the US charge d’affaires David Bisbee said. It now appears that China has no intention of making the reforms it promised 20 years ago, he added. “Instead, China has used the imprimatur of WTO membership to become the WTO’s largest trader, while doubling down on its state-led, non-market approach to trade, to the detriment of workers and businesses in the United States and other countries,” the US official claimed. The US official singled out China’s industrial policies – an issue that the US is trying to get the WTO to address through changes in the rules. “While other WTO Members also seek to help their industries develop, China’s approach is materially different,” Mr. Bisbee stated. “China’s industrial policies go well beyond guiding and supporting domestic industries. China’s industrial policies skew the playing field against imported goods and services and foreign manufacturers and services suppliers through an array of supporting measures,” he said. Those measures include market access limitations, investment restrictions, massive subsidies that lead to severe and persistent excess capacity, preferential treatment for state-owned enterprises and other favored Chinese companies, discriminatory regulatory requirements, unique national standards, data restrictions, inadequate enforcement of intellectual property rights, cyber theft and the use of competition law enforcement for industrial policy purposes, the US official said. He also criticized China’s alleged use of forced labour and “economic coercion” of other countries that speak out against China’s practices. Washington will continue to pursue “all available tools in an effort to persuade China to make needed changes,” Mr. Bisbee stated. Around 49 members took the floor to offer their specific comments at China’s eighth trade policy review. Several countries urged China to take the leadership role and accelerate its reforms. Australia pressed China to play a more constructive leadership role in the WTO, including by relinquishing its access to special and differential treatment. Since its last trade policy review in 2018, Australia said that “China has increasingly tested global trade rules and norms by engaging in practices that are inconsistent with WTO commitments.” It criticized the policies implemented by China during the past 18 months. Switzerland said China has shown remarkable resilience in the face of the health crisis, with its economy growing at a high rate despite the challenging context, and the important achievements made in poverty reduction. Switzerland noted the substantial developments regarding intellectual property (IP) and welcomed China’s strengthening of patent protection and enforcement. However, it considered that there is still room for improvement and encouraged China to undertake further efforts to strengthen its IP regime. Japan raised concerns with regard to China’s lack of transparency and urged China to use the opportunity of this trade policy review to take further action that truly can contribute to maintaining and strengthening the multilateral trading system, starting by addressing in a transparent way issues that impact the market, such as trade-distorting measures, state-owned enterprises, and the lack of clarity in laws and regulations in this respect. The EU said that China’s entry into the WTO had raised expectations for further liberalization and of movement toward a fruitful market-based economy. The EU, however, lamented that the degree to which China has reformed and opened is not commensurate with its weight in the global economy, or comparable to the access China has to the markets of other WTO members. The EU maintained that the influence exerted by the state on China’s economic environment generates competitive distortions worldwide, leading to systemic problems for global trade. For those reasons, the EU encouraged China to re-engage, open up and adopt further market reforms. It should also assume its responsibility and play a role in the WTO that matches its economic weight, the EU said. The EU called on China to eschew its entitlement to special and differential treatment in the ongoing negotiations. “Another priority area,” the EU said, “should be improving compliance with notification obligations across the board, including on industrial subsidies and agricultural support.” The EU voiced concern over the “increasing prioritization of China’s business environment, the economic pressure on companies’ operations that seem motivated by political considerations, and China’s expansive use of an excessively broad concept of national security, negatively affecting foreign companies.” The EU said that China’s new measures on data security, privacy, and critical infrastructure are also a cause of concern. Canada also expressed concern over “the role of state-owned enterprises, which benefit from preferential treatment and direct access to contracts in a non-transparent manner”, and “the extensive use of industrial subsidies that lead to trade distortions and overcapacity.” Canada called on China to come back to the G20 Global Forum on Steel Excess Capacity. In its remarks, India said “bilateral trade is skewed in favour of China with a trade deficit of nearly US dollar 46 billion, which is growing.” India also expressed sharp concern over the barriers imposed against its exports, particularly on agricultural products. The Indian official expressed sharp disappointment over the use of sanitary and phytosanitary measures by China during the pandemic, as a pretext to block many Indian exports, particularly seafood exports. It argued that India has also “faced cumbersome and non-transparent regulatory requirements not allowing pharma companies to obtain market approvals for various generic formulations and registration of formulations, which normally takes only a few months in the international market, but is taking up to three years in China.” China’s eighth trade policy review is expected to conclude on 22 October, when China will be responding to the remaining questions and statements from the members.
|
||
