WTO Reform: A China Round?

Abstract

Since its accession to the World Trade Organization (WTO), China's exports have been growing exponentially. In 2009, China became the world's top goods exporter. Four years later, China unseated the United States as the top trading nation in the world. In contrast to the burgeoning Chinese economy, the United States and Europe have been suffering from economic decline since the global financial crisis in 2008. China regards its rise as a long overdue restoration of its rightful position, as it has been the largest economy in the world for most of its history, except the brief aberration over the past 150 years. The Western powers, however, view China's rapid development with suspicion, as they attribute China's success mostly to its state-led development model, with state-owned enterprises, massive subsidies, and heavy government intervention playing a major role.

Reforming the World Trade Organization: Practitioner Perspectives from China, the EU, and the US

“…China's institutional role is not yet commensurate with its weight in the world economy. China has indicated it will accept reforms that make the WTO better for all members, but not ones that challenge its identity as a developing country, that deny it scope for how it organizes its economy, and that fail to recognize its status as a major power (Liu, 2019;Gao, 2021;Tan, 2021).…”

“…would signifi cantly limit China's access to SDT because of a provision restricting this to developing countries with per capita incomes below US$5,000. Gao (2021) suggests such an approach would allow China to be a developing country in name but not in practice.…”

“…it scope for how it organizes its economy, and that fail to recognize its status as a major power (Liu, 2019;Gao, 2021;Tan, 2021).…”

“…The EU has suggested flexibilities be made available to those members who actually need them to be able to fully benefi t from their membership in the organization, an approach advocated by former WTO offi cials (Low et al, 2019). This approach has long been advocated by some scholars as a more effective means of ensuring specifi c capability gaps be identifi ed and addressed (Gao, 2021). 12 Survey respondents from China, the EU and the US are close to each other in the utility they would receive from resolving differences on SDT (Figure 2) but, surprisingly, in results not shown here, all three sets of respondents accord signifi cantly less weight to such a resolution than respondents located in other WTO members.…”

“…In contrast, an Indian proposal on subsidies for fi shing in a country's exclusive economic zone that contribute to overcapacity (WTO, 2020e) would signifi cantly limit China's access to SDT because of a provision restricting this to developing countries with per capita incomes below US$5,000. Gao (2021) suggests such an approach would allow China to be a developing country in name but not in practice.…”