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TWN
Info Service on WTO and Trade Issues (Jul24/17) Geneva, 17 Jul (D. Ravi Kanth) — Many developing countries on 17 July seemingly “complimented” China for its role in the global trading system, including on South-South cooperation as well as being a market for imports of agriculture and other raw materials, during its ninth trade policy review at the World Trade Organization. In contrast, the United States and other members of the Group of Seven (G7) industrialized countries, as well as the European Union, seemingly launched a proverbial “broadside” against China’s central trade policies allegedly based on “state-led”, “non-market” and heavily state-subsidized industrial policies, said people familiar with the development. In a seemingly coincidental development, on the day when the US appears to have berated China on its trade policies, Beijing’s request for the establishment of a dispute panel against certain subsidies granted by Washington through its controversial Inflation Reduction Act (IRA) of 2022, was circulated by the WTO Secretariat (see separate story). On the first day of China’s ninth trade policy review at a meeting of the Trade Policy Review Body (TPRB), the comments and questions raised by the participants seem to have revealed a growing divide between the Northern countries’ overall targeted policy perspectives against China, and the perspectives of many developing countries, said people familiar with the discussions. While many of these industrialized countries, including the US, continue to benefit from cheap Chinese imports, they seem to be drawing up new supply chains as well as trade policies based on the notion of “de-risking”, said people familiar with the development. Surprisingly, while the G7 countries’ sanctions and countervailing duties on Chinese electric vehicles, batteries, solar panels, and solar cells seem to be growing by the day, they seem to be working very closely with China in attempting to change the practice of consensus-based decision-making at the WTO and promoting the controversial plurilateral Joint Statement Initiatives (JSIs), said people familiar with the development. CHINA’S INITIAL REMARKS AT TPRB China’s vice minister, Mr Li Fei, delivered a 12-page statement at the TPRB meeting touching on several issues. They include: * “The engine of global growth”; * Being the “vast market to the world”; * Remaining as “a fertile ground for foreign companies to take root and thrive”; * Supporting “developing countries in accelerating their development”; * A “high-standard opening-up on a deeper level (China’s overall import tariff around 7%)”; * Supporting “developing countries in accelerating their development” (zero-tariff on imports from least- developed countries); * Sustained “expanding/opening-up in services”; * Relaxing “market access for foreign investors”; * Building “its pilot FTZs (free trade zones) and free trade port at a faster pace: * Continued trade liberalization “through free trade areas (particularly the RCEP or regional economic partnership agreement)”; * Committed to “deepening reform for sustainable development”; * Improving its “market economy”; * Pursuing “a transition toward green and low-carbon development through technological innovation”; * Striving “to make the economy work for more people”; * Supporting “the WTO playing a better role” by practising “true multilateralism” while supporting “the WTO reform in the right direction, the inclusive development of the multilateral trading system and the lawful rights and interests of developing members”; * Engaging “fully and deeply” in “WTO reform”, China said it is “the first major developing fishing country to ratify the Agreement on Fisheries Subsidies. China supports an early conclusion of comprehensive and balanced fishery disciplines. China attaches great importance to agriculture negotiations, and calls for more fair and reasonable rules. China collaborated with more than 120 members to reach the Agreement on Investment Facilitation for Development, and will strive to incorporate the agreement into the legal framework of WTO at an early date. China has played a constructive role in e-commerce negotiations, and supports early conclusion of high-standard multilateral digital trade rules. China also actively promotes dispute settlement reform and supports a fully and well-functioning dispute settlement system accessible to all members as soon as possible”; and * Continued support for “inclusive development of the multilateral trading system. Opposed to unilateralism and protectionism, decoupling or unjustified bashing.” As the WTO marks its 30th anniversary, Mr Fei concluded on the first day with the Chinese saying that emphasized that “one should be able to establish himself at the age of thirty”. US “BROADSIDE” The remarks made by the G7 countries appear to have revealed a high degree of commonality, with the US being the harshest critic of China’s trade policies at the meeting. According to people who spoke to the SUNS on the condition of anonymity, the US said that after acceding to the WTO over two decades ago, China failed to implement any of the changes it had agreed to in its accession protocol. China failed to embrace any market-oriented policies, the US claimed, emphasizing that Beijing doubled down on state-oriented policies to the detriment of the world economy and WTO members, according to people present at the meeting. Beijing has accelerated the state-led policies by promoting state-owned enterprises through an unstoppable flow of subsidies, while pursuing non-market “predatory” policies, the US said, according to people present at the meeting. “China remains the biggest challenge to the international economy,” the US claimed, quoting its US Trade Representative, Ambassador Katherine Tai’s, comments, said people familiar with the discussions. The EU, Australia, Canada, and the United Kingdom among others severely criticized China’s promotion of state-owned enterprises and alleged non-market policies, in varying levels of emphasis. SOUTH PRAISES CHINA In contrast to the rather hostile and severely critical remarks levied against China by the Northern countries, many developing countries seemingly showered praise on China over its trade policies. Indonesia apparently praised China for its positive trade policies, including growing cooperation with the RCEP (Regional Comprehensive Economic Partnership) countries. South Africa said that “it is heartening to hear China express its support for multilateralism”, in the face of “global fragmentations, economic divergences, and growing risks to supply chains.” “All these forces hurt the development prospects of African countries,” South Africa said, adding that China continues to pursue “progressive multilateralist responsibilities” as well as being “vocal on dispute settlement reform.” Moreover, it said “China has actively contributed papers to the Committee on Trade and Environment, lent its weight to developing countries’ proposals on special and differential treatment, and supported developing countries on their stance on policy space for industrial development.” “As my friend, Ambassador Dandy Iswara of Indonesia noted in his statement, all of this demonstrates that China is a responsible stakeholder in the multilateral trading system,” South African trade envoy, Ambassador Mzukisi “Mzu” Qobo, said. Significantly, South Africa praised China’s efforts in “bolstering South-South trade.” Citing a 2023 report by UN Trade and Development (formerly known as UNCTAD), the South African trade envoy said, “South-South trade can help developing countries achieve the Sustainable Development Goals. According to the report, the value of South-South trade passed from US$600 billion in 1995 to US$5.3 trillion in 2021.” South Africa said, “Today, the volume of South-South trade is higher than that of North-South trade and growing faster than the world average. China has a significant role to play in promoting industrial development on the African continent.” Commenting on “unilateral trade measures,” South Africa said: “We are pleased that China does not engage in unilateral trade measures in the name of environmental protection. The world is confronted by a growing slew of non-tariff measures, many of which are imposed by advanced industrial economies.” The South African trade envoy urged China “to use its influence in the WTO to oppose these measures. This is crucial for supporting resilient global supply chains.” The trade envoy concluded with an ancient Chinese poem: “With high tide and tailwind, it is time to sail a smooth ride.” Several other developing countries as well as least-developed countries supported China’s overall trade policies at the meeting, said people familiar with the development. +
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