20 fruitful years
JIN DING/CHINA DAILY
Having fulfilled all its WTO accession commitments, China is striving to enhance the authority and efficacy of the organization
It has been 20 years since China joined the World Trade Organization to become its 143rd member. China fulfilled all its WTO accession commitments by 2010 and has grown to be a key member of the organization.
However, the country's commitment and fulfillment have been doubted and misinterpreted since it acceded to the WTO in 2001. Following their accession, WTO members generally need a transition period to implement their commitments, which is recognized by the other members. Instead of questioning or challenging, they negotiate specific policies and relevant impacts.
For instance, the dispute between the European Union and the United States over government subsidies to the aircraft industry, lasting over a decade, was put aside this year. Although they took retaliatory measures as the situation escalated, neither of them criticized the other. But China with 20 years of membership is still singled out and faces negative comments from the developed countries.
Evaluating China's fulfillment of commitments should be based on legal documents it signed upon its accession, the Protocol on China's Accession to the WTO and the Report of the Working Party on the Accession of China.
The Chinese government has revised laws, regulations and policies to conform with the WTO rules. Since 2001, over 2,300 laws and regulations have been reviewed and revised as necessary by the central authorities, and more than 190,000 regulations by local authorities.
China has earnestly fulfilled its commitments upon entry into the WTO by offering market access for trade in goods. While significantly reducing import tariffs, it has also worked on eliminating non-tariff barriers. Its overall tariff level has dropped from 15.3 percent at the time of joining the WTO to 7.4 percent, with its tariff binding coverage reaching 100 percent.
It has cut the average tariff rate of agricultural products to 14.8 percent, far lower than those imposed by the WTO's other developing members (56 percent) and the developed members (39 percent). The rate of non-agricultural products, including manufactured goods, forestry products and fisheries, declined to 6.5 percent, significantly lower than that of other emerging markets, and the gap with developed countries has narrowed.
More companies have been granted the right to handle foreign trade transactions. Since July 2004, China replaced its approval system with a registration system for foreign trade authorization, releasing the immense vigor of companies, especially private businesses, which has led to a surge of foreign trade in the private sector, and laid an institutional foundation for China's flourishing cross-border e-commerce. In 2019, Chinese private enterprises surpassed foreign-invested companies for the first time to become the largest foreign trade entity in the country. They accounted for 46.6 percent of China's total foreign trade volume in 2020, up from 6.6 percent in 2001.
China had honored all of its commitments on trade in services by 2007. Of the 160 services sub-sectors under the 12-sector WTO classification, China opened up 100 sub-sectors under nine sectors. It also actively implemented the negative list system across the board for market access, easing access restrictions on foreign investment in the services sector. On July 23,2020, the government released the 2020 negative list for foreign investment, increasing the openness of key areas of the service sector.
Although some members accuse China of gaming WTO rules on intellectual property rights protection, the issue, part of China's commitments to the organization, has been a core concern for the country.
According to a survey about China's business climate in 2020 released by the American Chamber of Commerce in China, 69 percent of the respondent US companies believed intellectual property rights protection in China had improved and reached a new high. The results of the Business Confidence Survey 2020 issued by the EU Chamber of Commerce in China showed that 67 percent of surveyed EU enterprises rated the effectiveness of China's laws and regulations on intellectual property rights protection as "excellent" or "adequate".
It is not that China has never been a topic of disputes in the WTO. From 1995, when the WTO's dispute settlement mechanism officially started operating, to August 2021,607 disputes had been brought to the WTO, and among those cases, the US was sued 156 times, the EU 88 times, and China 47 times.
However, between 1995 and 2020, the WTO issued 25 arbitral decisions in 19 cases against members that failed to perform or delay the performance of their statutory duty, 18 of which were against the US and five against the EU. China was not on the list. The accusations of the US and the EU against China only embody their prejudices against China.
The US government has made several public statements or released reports on China's fulfillment of its WTO commitments, all of which criticize China for keeping certain areas off-limits to foreign investments and supporting domestic manufacturing through industrial development plans and subsidies. Each economy has the right to boost its domestic industry through certain policies, and China's plans have been designed according to its different stages of economic growth. Now, the US government generalizes the concept of national security and abuses export control measures, threatening some Chinese enterprises' development and the supply chain of industries. As a result, the Chinese government has adopted policies responding to these unreasonable behaviors.
China, earnestly implementing its obligations, has no reason to undermine the existing WTO system. Now that the WTO and economic globalization face severe challenges, all members should uphold the multilateral trading mechanism based on the WTO rules in the spirit of mutual benefit, and jointly promote necessary reform of the WTO so as to overcome its existential crisis, enhance its authority and efficacy, and support the stability and healthy development of economic globalization.
The author is dean of the China Institute for WTO Studies at the University of International Business and Economics. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.