Chapter 15 WTO and China

1. Chapter 15 WTO and China By Li xuefeng

2. History of China’s WTO Entry 1 The balance of rights and duties 2 The advantages and disadvantages of China’s WTO Entry 3 Language points 4 Contents

3. History of China’s WTO Entry Step 1 Step 2 Step 3 • Brief introduction of history • Three Principles • China WTO-accession documents

4. 世贸组织总部外景 多哈会议：中国加入世界贸易组织 会议主席卡迈勒击槌通过中国入世。 “入世槌”收藏革命博物馆

5. History of China’s WTO Entry • China was voted in as a member on November 11, 2001 but became an official member one month later, December 11, 2001 • In order for China to gain member status, China had to agree to separate negotiations with all of the current WTO members • China tried to get member status for 15 years prior to 2001

6. 1948---one of the 23 founding Members of the GATT • 1950---the Taiwan Government withdrew from the GATT 1993年8月7日，1985辆雪佛兰汽车从美国运抵天津港，美方人员打出一幅写有“感谢你，中国”的横幅。

7. Timeline for Qualification • 1986 -- China applies to join General Agreement on Tariffs and Trade (GATT), predecessor to WTO. • 1989 -- China's suppression of pro-democracy demonstrators in Tiananmen Square on June 4 derails negotiations. • November 1995 -- China unveils economic and trade reforms aimed at winning U.S. backing to enter the WTO. It plans to slash import tariffs by 30 percent and allow joint venture companies to be set up.

8. the Sina-US Bilateral Agreement 1999~~~2001 Wide-scope Agriculture Industrial Services The Sino-EU Agreement 1999~~~~2001 Scope agriculture Automobile Services The toughest negotiations

9. April 8, 1999 -- President Bill Clinton and Premier Zhu Rongji sign a joint statement in Washington welcoming substantial progress and committing them to completion of a WTO deal by the end of the year. The gap is closed on about 90 percent of WTO issues. • May 7, 1999 -- China freezes WTO talks after NATO forces accidentally bomb the Chinese embassy in Belgrade.

10. September 11, 1999 -- Clinton and Chinese President Jiang Zemin agree on the sidelines of the Asia-Pacific Economic Cooperation (APEC) forum in New Zealand to resume WTO negotiations. • November 15, 1999 -- U.S. and China announce a WTO pact. China agrees to open a wide range of markets, from agriculture to telecommunications. Clinton must persuade the U.S. Congress to grant China permanent normal trade relations (PNTR).

11. May 19, 2000 -- The European Union signs a WTO accession pact with China • October 10 -- Clinton signs a law giving China normal trade status with U.S. • January, 2001 -- Further multilateral talks end in acrimony as China and some WTO members disagree on farm subsidies.

12. June 9 -- China and the U.S. announce consensus on issues holding up China's entry, including farm subsidies, after meetings on the sidelines of an APEC trade ministers' meeting. • June 20 -- The European Union says it has resolved outstanding bilateral issues with China over its accession.

13. September 14 -- WTO members agree on terms for China's entry at an informal meeting, clearing the way for the nation to join by the end of the year. • November 10 -- Trade ministers from across the world officially approve China's entry. The move was approved unanimously at the WTO meeting in the Gulf state of Qatar

14. December 11 -- China ends its 15-year quest to join, officially becoming a fully-fledged member of the international trading system. • http://archives.cnn.com/2001/WORLD/asiapcf/east/09/18/china.wto.timeline/

15. The three principles of China’s WTO Entry • a WTO without China’s participation is incomplete • China will undoubtedly join the WTO as a developing country • China’s accession to WTO is based on the principle of the balance of rights and duties. -----by President Jiang Zeming in 1996

16. Compilation of the legal instruments on China’s Accession to the WTO ---中国加入世界贸易组织法律文件 • Decision: Accession of the People’s Republic of China • Protocol on the Accession of the People’s Republic of China • Part I : most-favored-nation tariff (agriculture—tariff) • Part II: preferential tariff • Part III: non-tariff concessions (tariff-rate on fertilizer and wool) • Part IV: agricultural products: commitments limiting subsidization (domestic support, export subsidies) • Annex 9: schedules of specific commitments on services • List of article II MFN Exemptions • Report of the working party on the accession of China

17. What should be stressed is that ： Rules and commitments established in China’s WTO-entry instruments are an integral part of WTO rules. That both China and any other WTO Member shall abide by WTO rules also means with which the provisions in China’s WTO accession documents will be complied.

18. The balance of rights and duties the rights China enjoys • Enjoy the multilateral, stable and unconditional MFN status provided to the WTO Members; • Enjoy the achievements gained by other countries and regions from trade liberalization; • Participate in the formulation of international trading rules; • Utilize the WTO’s multilateral dispute solution mechanisms to safeguard China’s rights and interests; • Enjoy a developing country’s preferential arrangements, export subsidies for infant industries and elastic stipulations of the tariff system; • Retain a 25% import tax rate in its auto industry after a 6 year period.

19. Major obligations that shall be performed • Uniform administration of WTO rules • -----WTO rules shall apply to the entire customs territory of China, including border trade regions and minority autonomous areas, Special Economic Zones, open coastal cities, economic and technical development zones and special economic areas. • Ensuring the transparency of foreign trade policies. • Strengthening judicial review • Enforcing the non-discrimination principle • Lessening the limitation on right to trade

20. Strengthening the restriction on state trading • Diminishing or eliminating non-tariff measures • Administrating price controls • Elimination of subsidies concerned • Perfecting the implementing rules on agricultural products • Perfecting trade related intellectual property regime

21. The advantages & disadvantages of China’s WTO entry Advantages: • As a member of WTO, China can strengthen its economic and trade relations with various countries and regions around the world; • China’s entry into the WTO will help China further participate in the economic globalization;

22. Through joining the WTO, China will further speed up the pace of improving its market economic structure, and opening outside world in a wider scope • The WTO membership will help China continue to intensify economic restructuring and promote the national economic structural readjustment; • And it will help improve total employment and raise people’s living standards

23. Disadvantages • The commitments China has made will inevitably entail some short-term economic costs, for example, in raising unemployment in some sectors; • With the inflow of more foreign products and service trades into the domestic market, some Chinese industries will face fiercer competition, and even be threatened with bankruptcy; • State-owned enterprises without good management and products will have to suffer from losses.

24. SoChina's entry into the WTO has both advantages and disadvantages, but on the whole, it serves China's fundamental and long-term interests. China's success in entering into the WTO marks a new stage for its reforms and opening up.

25. Language points • Key words • Entail (P184) • To have, impose, or require as a necessary accompaniment or consequence: • 承担，伴随，需要：施加或要求使成为必要的附属物或结果： • The commitments that China has made will inevitably entail some short-time economic costs.

26. Revoke (P191) • v. To void or annul by recalling, withdrawing, or reversing: • 撤消，撤回：通过取消、撤回或废弃而使无效或废止： • In the bilateral agreement between the Chinese and US governments, the US promises that it will revoke import quotas on textiles in 2005.

27. What has been changed/reformed? • China’s entry into the WTO set in motion the most far-reaching reforms since Beijing since 1978. • Over 1100 laws and regulations have been changed since 2001 • China can not impose one level of barriers (e.g., tariffs) against one member country and another level for others • China will participate in the WTO's dispute settlement system • Manufactured goods saw the largest decrease in tariffs. • Tariffs were eliminated on computers, semiconductors and other information technology products in compliance with the Information Technology Agreement • In agriculture, it has pledged to bind all tariffs and reduce them from an average level of 31.5 percent to 17.4 percent • Foreign car makers will be able to distribute and retail vehicles on their own, and provide financing to buyers.

28. What has been changed/reformed? • China has promised to open its telecommunications, financial services, distribution, and many other industries to foreign service providers. • Pledged to apply its trade policy uniformly across the country and to enforce only those laws, regulations, and other measures that have been published beforehand. • Agreed to eliminate all prohibited subsidies (including those to state-owned enterprises), liberalize trading rights, and require state trading companies to conduct their operations in a commercial manner. -http://www.imf.org/external/pubs/ft/fandd/2002/09/adhikari.htm