WTO reform: global agenda and China’s position

LIAO Fan1

(1.Institute of International Law of Chinese Academy of Social Sciences)

【Abstract】The World Trade Organization (WTO) is facing an unprecedented survival crisis and it has become a consensus that the organization needs to be reformed. However, the involved parties are divided over the basic principles, content and priorities of the reform. Proposals that have been submitted to the WTO so far generally support increasing the flexibility of the organization’s negotiation mechanism, thus breaking the multilateral negotiation deadlocks caused by the consensus requirement, and support making new trade rules, enhancing fair trade and eliminating investment barriers; they also support improving the review and surveillance functions of the WTO to ensure better compliance of the transparency and notification obligations by its members; in terms of dispute resolution, they support timely revision of relevant protocols and breaking the “deadlock” of designation of appellate body members to ensure the normal functioning of the organization. For China, the key is to clearly understand its basic position and core concerns and present more specific reform proposals on the basis of the current Position Paper, so as to more actively participate in and push forward the reform process.

【Keywords】 WTO reform; consultation and consensus of WTO; competitive neutrality; transparency; dispute settlement;

【DOI】

【Funds】 the Chinese Academy of Social Sciences (2017GJFSB01)

Download this article

(Translated by WANG Zi)

    Footnote

    [1]. [1] Not long before the end of the Second World War, delegates from 44 countries participated in Bretton Woods, New Hampshire of the United States (the Bretton Woods Conference) and approved Final Act of the United Nations Monetary and Financial Conference, as well as the two attachments, Agreement of the International Monetary Fund and Articles of Agreement of the International Bank for Reconstruction and Development, combined as the Bretton Woods Agreements. The conference also discussed the idea to establish the International Trade Organization (ITO). Although ITO failed to be established because of the strong opposition of the US Congress, its temporary substitution, General Agreement on Tariffs and Trade (GATT) became effective in January 1948 and evolved into WTO today. Therefore, GATT was usually taken as part to the Bretton Woods System, and WTO, IMF, and the World Bank together were called the Bretton Woods Institutions. [^Back]

    [2]. [1] Yang, G. International Business Research (国际商务研究), (6): 28–33 (2013). [^Back]

    [3]. [2] “Concept Paper: WTO Modernization”, http://trade.ec.europa.eu/doclib/docs/2018/september/tradoc_157331.pdf [2018-12-20]. [^Back]

    [4]. [3] “Joint Communiqué of the Ottawa Ministerial on WTO Reform”, https://www.wto.org/english/news_e/news18_e/dgra_26oct18_e.pdf [2018-12-20]. [^Back]

    [5]. [4] “Procedures to Enhance Transparency and Strengthen Notification Requirements under WTO Agreements, Communication from Argentina, Costa Rica, the European Union, Japan, and the United States”, https://www.wto.org/english/news_e/news18_e/good_12nov18_e.htm [2018-12-20]. [^Back]

    [6]. [5] Twelve parties, including the EU, China, Canada, India jointly submitted a communication (the Joint Communication), and the three parties, the EU, China and India jointly submitted another communication (the EU, China and Canada Communication). “Communication from the European Union, China, Canada, India, Norway, New Zealand, Switzerland, Australia, Republic of Korea, Iceland, Singapore and Mexico to the General Council; Communication from The European Union, China and India to the General Council”, http://trade.ec.europa.eu/doclib/docs/2018/november/tradoc_157514.pdf [2018-12-20]. [^Back]

    [7]. [1] http://www.mofcom.gov.cn/article/jiguanzx/201812/20181202817611.shtml [2018-12-20]. To conclude, the three basic principles are: preserving the core values of the multilateral trading system (none-discrimination and openness), safeguarding the development interests of developing members and following the practice of decision-making by consensus. The five suggestions are: upholding the primacy of the multilateral trading system; the priority of the reform as to address the existential problems faced by the WTO; addressing the imbalance of trade rules and responding to the latest developments of our time; safeguarding the special and differential treatment for developing members; and respecting members’ development models. [^Back]

    [8]. [2] The only exception was the Trade Facilitation Agreement approved in December 2013, which mainly referred to simplifying the custom clearance procedures and other procedural items and had limited value in rule-making. [^Back]

    [9]. [1] “Reinvigorating Trade and Inclusive Growth”, https://www.wto.org/english/news_e/news18_e/igo_30sep18_e.pdf [2019-01-13], pp. 35–36. [^Back]

    [10]. [2] The unique features and negotiation objectives of these new areas make it possible to realize the “one-way benefit.” “Since their objective is seemingly not to exchange market access ‘concessions’ but to improve regulatory coordination—in order to minimize policy frictions and advance shared goals in a ‘least trade restrictive’ way—they could lead to a more cooperative, less mercantilist, approach to WTO negotiations in the future. Indeed, new rules in these areas would likely be inherently non-discriminatory—because they involve domestic regulations that cannot easily be tailored to benefit specific trade partners—making concerns about ‘discrimination,’ like calculations of ‘reciprocity,’ less relevant.” “Reinvigorating Trade and Inclusive Growth”, https://www.wto.org/english/news_e/news18_e/igo_30sep18_e.pdf [2019-01-13], pp. 35. [^Back]

    [11]. [1] “Joint Statement on Trilateral Meeting of the Trade Ministers of the United States, Japan, and the European Union”, http://www.meti.go.jp/press/2018/05/20180531009/20180531009-2.pdf [2018-12-20]. [^Back]

    [12]. [2] “Joint Statement on Trilateral Meeting of the Trade Ministers of the United States, Japan, and the European Union”, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/september/joint-statement-trilateral [2018-12-20]. [^Back]

    [13]. [3] Currently, prohibited subsidies in Agreement on Subsidies and Countervailing Measures (ASCM) consists of only export subsidies and import substitution subsidies. [^Back]

    [14]. [1] Xiang, A. China Economic Times (中国经济时报), (5) (2016-6-22). [^Back]

    [15]. [2] Xi, J. Xinhua Daily Telegraph (新华每日电讯), (1) (2018-11-2). [^Back]

    [16]. [3] http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/3643836/index.html [2018-12-20]. [^Back]

    [17]. [4] Both the Joint Statement of May and the Joint Statement of September highlighted: “The Ministers confirmed their shared view that no country should require or pressure technology transfer from foreign companies to domestic companies, including, for example, through the use of joint venture requirements, foreign equity limitations, administrative review and licensing processes, or other means.” [^Back]

    [18]. [1] “China Criticizes WTO Transparency Proposal Advanced by U.S., Others”, https://insidetrade.com/trade/china-criticizes-wto-transparency-proposal-advanced-us-others [2019-01-13]. [^Back]

    [19]. [2] According to Article 17.1 of Understanding on Rules and Procedures Governing the Settlement of Dispute (DSU), “the Appellate Body shall be composed of seven persons, three of whom shall serve on any one case. Persons serving on the Appellate Body shall serve in rotation. Such rotation shall be determined in the working procedures of the Appellate Body.” But due to America’s intervention, by the end of September 2018, only 3 members remained in the Appellate Body and 2 of them would leave at the end of 2019. In other words, if the current selection impasse continued, the suspension of Appellate Body would set in soon. [^Back]

    [20]. [1] “The President’s Trade Policy Agenda”, https://ustr.gov/sites/default/files/files/Press/Reports/2018/AR/2018%20Annual%20Report%20I.pdf [2018-12-20], pp. 22–28. [^Back]

    [21]. [2] For example, the Appellate Body could give suggestions to the parties to voluntarily focus the scope of the appeal, set an indicative page limit on the parties’ submissions or take appropriate measures to reduce the length of its report. The suggestions could also include the publication of the report in the language of the appeal only, for the purposes of meeting the 90-day timeframe (the translation to the other WTO languages and formal circulation and adoption would come later). [^Back]

    [22]. [1] When interviewed by journalists on the above proposals, Dennis Shea, the US Ambassador to the WTO, said that “their ideas acknowledged the U.S. complaints ‘to some extent,’” but the solutions sought “only to change some rules to accommodate rule-breaking by WTO judges,” so “it is hard to see how it in any way responds to the concerns raised by the United States.” Tom Miles, “U.S. Not Swayed by WTO Reform Proposals”, https://money.usnews.com/investing/news/articles/2018-12-12/us-not-swayed-by-wto-reform-proposals [2018-12-20]. [^Back]

This Article

ISSN:1007-0974

CN: 11-3799/F

Vol , No. 02, Pages 32-43+4-5

March 2019

Downloads:3

Share
Article Outline

Knowledge

Abstract

  • Negotiation mechanism
  • Substantive rules
  • Disciplinary restraints
  • Dispute settlement
  • Conclusion
  • Footnote