Asia Times: China poised to take active role in WTO


	October 9, 2001	atimes.com

Global Economy

China poised to take active role in WTO
By Alexander Casella

GENEVA - Diplomatic observers in Geneva who have been following the 15-year saga of China's accession to the World Trade Organization (WTO) have defined the successful conclusion of the negotiation process as the end of the beginning.

While China is not yet officially a member of the WTO, it is a forgone conclusion that when the ministerial conference convenes in Doha in Qatar from November 9 to 13, it will rubber stamp the decision of the General Counsel to approve China's entry. Beijing's accession will be followed the day after by that of Taiwan under the label of Chinese Taipei. Thus, irrespective of political divides, the whole territory of what comprises China will be a part of the world trade system.

The entry of China into the WTO will probably, in the long term, have more far reaching consequences for the country than the coming to power of the Communist Party in 1949. Indeed, from a historical perspective, the year 2001 will mark the end of China's 50-year experiment with the tenets of a Marxist economy. Indeed, China's joining the WTO ensures that there can be no turning back from the past 22 years of economic reform, with its underlying political implications.

The prevalent feeling within the WTO is that China, over the past two decades, has proved that it is ready for a further expansion of its internal market economy. And while the economic reform process has undoubtedly fostered a considerable degree of social stress, it is also perceived as having led to a net gain situation by which some 150 million Chinese have moved beyond the poverty level.

Though the country is not yet formally a member of the WTO, the importance that China's leadership attaches to global commerce is demonstrated by the fact that the Chinese delegation to the world trade body has already indicated that it would favor a new round of international trade talks with particular relevance to agriculture, services and implementation procedures. While China, which until now has concentrated its efforts on the accession process, has not specified its position on these issues, there is a consensus that its main thrust will be towards further liberalization.

From within this overall perspective, a new round of international trade talks will not only demonstrate how far China has moved on the road to liberalization, but also how multifaceted the issue has become for Beijing. It is understood that the European Union is keen to see a liberalization of investments as part of a new negotiating process. While traditionally Beijing was hesitant to fully open its market to foreign investment, China has now become a major investor in textile production facilities in Africa.

Thus, China today both imports and exports investments and any restrictive policy it may wish to promote internationally would go against its policy of investing abroad.

Even if only for this specific example, diplomatic observers in Geneva feel that the whole concept of a conflict between the developed and the underdeveloped world is simply no longer relevant and has been replaced by a sectorial approach. Thus, a number of developing countries increasingly see China both as a major competitor and as a source of investments.

While the issue is publicly downplayed, most observers feel that China's accession to the WTO could have a major impact on relations with Taiwan. At present, Beijing claims that any trade dispute with Taiwan is an "internal" matter. Conversely Taiwan claims that the implications of any such possible future disputes are "being looked into". Most observer feel that it is unavoidable that the two Chinese parties will sooner or later be confronted by the issue of the "three freedoms", namely freedom of transportation, of trade and of postal services. Were there to be any disputes on these issues, or on any other trade issues, these will now be initially addressed by an independent judicial review operating in China. This body will be independent from the state Chinese judicial system.

In case of persistent disagreement, the decisions of the review board can be appealed in front of the WTO tribunal in Geneva. In practical terms, this is tantamount to the first introduction of the rule of law in China, albeit for trade matters, with the possibility of recourse to an independent appeal process. By acceding to the WTO, China, for all practical purposes, has accepted to abide by internationally accepted rules. Clearly it is now keen to participate in the drafting of future rules.

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