China and the World Trade Organization

II. China Firmly Supports the Multilateral Trading System

The multilateral trading system with the WTO at its core is the cornerstone of international trade, and has been playing a pivotal role in promoting global trade and building an open world economy. Since its accession to the WTO, China has firmly supported the multilateral trading system, participated in all aspects of WTO work. It called upon the WTO to focus more on the concerns of developing members, opposed unilateralism and protectionism, upheld the authority and efficacy of the multilateral trading system, and made concerted efforts with other members in supporting the WTO to play a greater role in economic globalization.

1. Liberalizing and facilitating trade and investment

Participating fully in the Doha Round negotiations. China has submitted or co-sponsored more than 100 negotiation proposals, helped secure agreement on trade facilitation and export competition in agricultural products, and promoted the continuous improvement of the multilateral trading system. In 2015, China became the 16th WTO member to ratify the Trade Facilitation Agreement (TFA). During its G20 presidency in 2016, China encouraged a number of countries to complete their domestic ratification procedures of the TFA, prompting the agreement’s entry into effect at an early date.

Promoting plurilateral trade liberalization. As a developing country, China has actively participated in plurilateral liberalization initiatives and made important contributions to relevant talks. It accepted the Information Technology Agreement (ITA) upon accession, subsequently participated in the negotiations to expand its coverage, and encouraged relevant parties to reach agreement on eliminating tariffs of 201 information technology products. As one of the initiators of the negotiations on the Environment Goods Agreement, China always participated in relevant discussions in a constructive manner, and contributed to the important consensus reached at the G20 Summit in Hangzhou. In 2007, China started the negotiation on its accession to the Agreement on Government Procurement and has been making great efforts ever since.

Mobilizing support for discussing new issues in the WTO. China has encouraged the WTO to respond to and discuss new topics of general interest to the members such as investment facilitation, micro, small and medium-sized enterprises (MSMEs), and e-commerce. China initiated “Friends of Investment Facilitation for Development (FIFD)” and sponsored the Joint Ministerial Statement on Investment Facilitation for Development signed by over 70 members. China joined the “Friends of Micro, Small and Medium-sized Enterprises”, and shared with other members its proposals that support MSMEs. As an advocate of multilateral discussions on e-commerce in the WTO, China joined “Friends of E-commerce for Development (FED)”, shared its experiences and helped other developing members benefit from e-commerce.

Faithfully implementing the Trade Facilitation Agreement. As a developing member, China has actively promoted the implementation of TFA. It has set up the National Committee on Trade Facilitation to coordinate the efforts of relevant government agencies to enhance trade facilitation. By 2017, China’s provinces (as well as autonomous regions and municipalities directly under the central government) had all established a joint committee mechanism for trade facilitation in their respective jurisdictions. Regarding China’s TFA commitments, 94.5 percent of all commitments fall into Category A (immediately implemented upon entry into force of the TFA), and only four items belong to Category B (implemented after a transitional period following the TFA’s entry into force). China will honor its promise and implement all the Category B measures following a transitional period of three years after entry into force of the Agreement.

2. Safeguarding the dispute settlement mechanism

Safeguarding the effective operation of the dispute settlement mechanism. The WTO dispute settlement mechanism has played a vital role in maintaining the predictability of international trade and the stability of the multilateral trading system. China has actively participated in the negotiations on improving the Understanding on Rules and Procedures Governing the Settlement of Disputes and supports the independence and impartiality of the WTO Appellate Body. Despite the attempt of certain WTO member to obstruct the appointment of members of the Appellate Body, China joined more than 60 members in submitting a proposal on starting the selection process at the earliest possible date.

Properly handling trade disputes with other WTO members. China supports WTO members to solve their trade disputes within the WTO dispute settlement mechanism. By April 2018, China had brought 17 disputes to the WTO, of which 8 had been concluded. Meanwhile, China had been complained against in 27 disputes, of which 23 had been concluded. By lodging complaints in the WTO, China redressed other members’ violation of obligations under the covered agreements, and defended its own trade interests as well as the authority of WTO rules. China also actively defended the cases against it, respected the WTO rulings, and made adjustments to its measures according to WTO rules. Up to now, none of the complainants has requested for retaliation against China.

3. Fully participating in trade policy review

Attaching great importance to trade policy monitoring by other WTO members. The WTO trade policy review (TPR) mechanism is effective in enhancing the transparency of the multilateral trading system. China places great emphasis on the TPR process. Having undergone six TPRs on itself, China is preparing for the seventh one in July 2018. In an open and frank manner, China has briefed the WTO membership on its macro-economic, trade and investment policies, and listened attentively to their comments and suggestions on China’s reform and opening-up. Other WTO members applaud China’s active participation and regard China as an impressive example in reinforcing the role of TPR in monitoring commitments, ensuring compliance and enhancing openness.

Urging other WTO members to abide by multilateral trade agreements. Since its accession to the WTO, China has participated in nearly 300 TPRs on other members. It raised thousands of written questions and trade concerns to the members under review, urged them to abide by the WTO rules and their commitments, and played a positive role in safeguarding and strengthening the TPR mechanism.

4. Vigorously supporting the integration of developing members into the multilateral trading system

Supporting the WTO to focus on development. An important objective of the WTO is to ensure that developing members, especially least-developed country members, benefit from international trade and boost their economic growth. As the largest developing country, China understands the difficulties of developing members to benefit from the global value chains and participate in international economic and trade governance. China worked hard to make trade an enabler of the 2030 Agenda for Sustainable Development.

Providing pragmatic and effective support to other developing members. China has reinforced its aid to other developing members, especially least-developed country members, to bridge the South-North development gap. By March 2018, it had accorded zero tariff treatment on 97 percent of all tariff lines to 36 least-developed countries (LDCs) that have diplomatic relations with China and completed exchange of notes. Responding to the “Aid for Trade” initiative, China has contributed multilateral and bilateral resources to help other developing members, especially least-developed country members, with infrastructure construction, professionals training, productivity improvement, as well as trade and investment development. It has donated USD1 million to the WTO Trade Facilitation Agreement Facility to assist the implementation of the TFA. The LDCs and Accessions Program, established by China in 2011, has helped six LDCs accede to the WTO. Since 2017, China has strengthened cooperation with the WTO and other international organizations under the South-South Cooperation Assistance Fund, and carried out cooperative projects in “Aid for Trade” to help other developing members benefit from global value chains.

5. Firmly opposing unilateralism and protectionism

Unilateralism and protectionism run counter to the fundamental principles of the WTO. The multilateral trading system is a historic choice that follows the trend of global economic development. The WTO advocates the principles of rules, openness, transparency, inclusiveness and non-discrimination, and it will remain the main channel to address global trade issues. China explicitly opposes unilateralism and protectionism. Unilateralism goes against the law of the market and international rules, causes injury to others but ends up defeating oneself. Pursuing protectionism is like locking oneself in a dark room. While wind and rain may be kept outside, that dark room will also block light and air. Only through equal consultation and joint efforts can win-win results be achieved for all.

Pursuing free trade through platforms for multilateral cooperation. China advocates solving international trade problems through cooperation, dialogue and consultation on an equal footing. During the 22nd APEC Economic Leaders’ Meeting, the G20 Hangzhou Summit, and the BRICS Xiamen Summit, all hosted by China, the country increased coordination with all parties concerned, and secured statements on opposing trade protectionism in the outcome documents of these summits. When attending the Belt and Road Forum for International Cooperation, the Boao Forum for Asia, and the World Economic Forum, Chinese leaders repeatedly expressed their firm support for the multilateral trading system and an open world economy. In the WTO, the vast majority of members echoed China’s opposition to unilateralism and protectionism.