Permanent Mission of the People's Republic of China to the World Trade Organization

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Statement by H.E. Ambassador Zhang Xiangchen of China at the General Council Meeting (Item 6 and 7) October 13, 2020

Item 6. Procedures to Strengthen the Negotiating Function of the WTO--Statement by the United States (WT/GC/W/757/Rev.1 and WT/GC/W/764/Rev.1)

Thank you, Mr. Chairman.

I have repeated many times that, the debate on criteria to differentiate developing members is totally meaningless, as it is a systematic and directional mistake. Development is one of the key objectives of the WTO, which is also an important attraction for many countries choosing to join in this Organization. As WTO members, our focus on development should be on how to translate the concept of development into practice rather than anything else.

To be specific, our collective efforts should be focused on how to effectively enforce the existing special and differential treatment (S&DT) provisions, and negotiate meaningful S&DT for the developing members, for example in the fisheries subsidy negotiations. For the existing S&DT provisions, there should be assurance that developing members in need could truly benefit from and fully integrate into the multilateral trading system.

Mr. Chairman, we did a preliminary review on the current 155 S&DT provisions contained in the 16 WTO agreements, finding that at least 105 provisions are too vague to operate, accounting for 67.7%; for the remaining 50 provisions, at least half of them are related to transitional period or technical assistance. So, there are only 25 S&DT provisions in existing WTO agreements that are directly linked to individual Members’ rights and obligations, accounting for 16.1% of the total. It is therefore fair to say, the overwhelming majority of current S&DT provisions are only pie in the sky. There has never been an almighty blank check.

It is a long-standing consensus to make S&DT provisions more “precise, effective, and operational”, which is also a commitment across WTO Agreements. That is the very reason why developing members requested to discuss more than 200 “Implementation Issues” aiming at rebalancing the imbalanced rules from the Uruguay Round, and G90 put forward their written proposals. I fully endorse the statement made by the Ambassador of South Africa. Actually, recalling the past 20 years, G90 has been compromising by reducing their 88 original requests, to 25 in Nairobi, and to 10 in Buenos Aires, demonstrating their utmost sincerity and restraint. Such reduction is not because their request was wrong, rather it is because they do hope all Members could be engaged and thus show flexibility.

For the current 10 proposals, some are to fill the loopholes of existing provisions, such as proposing procedural arrangement to invoke Article 18 of GATT; some are to restore good practices in multilateral rules, such as treating subsidies granted by LDCs and developing members facing certain constraints as non-actionable subsidies according to Article 8 of ASCM; some are to allow developing members to have longer time-frames for transitions or comments, such as granting 180 days for members facing capacity constraints to make comments on SPS measures notified by developed members, whereas the current practice is 90 days; some are to urge developed members to honor their already-committed obligations, including technology transfer. G90 has made comprehensive responses both orally and in writing to all questions from members on their proposals. However, no progress has been made due to certain Members’ reluctance to engage.

Mr. Chairman, the WTO is a rule-based organization. If we want to win back people’s confidence in this organization, the most fundamental thing is to treat existing rules and implement promised commitments, with respect and awe. To make existing S&DT provisions “more precise, effective and operational” is the clear commitment and unfinished mission of all members, which is also the most urgent task in the area of development. I call upon all members to show our sincerity by meaningfully engaging in the discussion of the G90 proposal and carefully responding to practical concerns of developing members, rather than wasting time and resources on no outcome debates.

Mr. Chairman, since China was mentioned specifically, I would like to make a comment to respond. China standing against to the differentiation of developing members does not mean we want to enjoy the same favorable treatment as small economies and LDCs. What we want is only to safeguard our institutional right of S&DT.

In practice, according to our accession agreement, China has 14 specific S&DT provisions among all 155 articles, accounting only for 9%. Among the 14, 6 provisions are traditionally “obligations” of the developed members, such as providing translations of documents in WTO official languages upon request, only 8 provisions are so called meaningful “rights”, such as relatively higher tariffs for certain goods.

Even in such circumstances, China always shows restraint in invoking S&DT provisions. Obviously, China did not request to have the same S&DT as Benin, Liberia, Kenya or Pakistan, which was proclaimed by the United States. On the contrary, as a large trading nation, we recognize the responsibility China should bear. Our approach is to address different issues according to their specific situations and make contributions within our capability. As we did in the ITA expansion negotiations, China is the largest contributor among all the participants. We will continue to do that in the future.

Thank you, Mr. Chairman.

Item 7. Importance of Market-Oriented Conditions to the World Trading System--Joint Statement by Brazil, Japan, and the United States (WT/GC/W/803/Rev.1)

Thank you, Mr. Chairman,

It is true that the multilateral trading system is built on the basis of market economy, and all the WTO rules reflect the prevailing practices of market economy and are binding on all Members. There is also no doubt that in the past 40 years, China persistently deepens its reform and opening up to the world in the direction of market economy, which is exactly the basis of our accession to the WTO and the reason for our firm support for the multilateral trading system.

However, the challenge we are facing is not what Marrakesh Declaration says, but what some Members are doing. By the way, with regard to Marrakesh Declaration, when we talk about open and market-oriented policies, we should not forget Article 5, which I quote “Ministers recall that the results of the negotiations embody provisions conferring differential and more favorable treatment for developing economies, including special attention to the particular situation of least-developed countries”. Those words are equally important. Unfortunately, now some Members have selective amnesia.

I have no intention to repeat what I have said at the previous meeting that “common sense issues like market orientation do not need to be discussed at the General Council”, and simply dismiss the whole discussion. Albert Einstein, a scientist who had worked in Bern, once said, “Success is equal to hard work plus correct method plus less empty talk”. Chinese people have also believed in “empty talks harm the country” since ancient times. So, my questions are: what is the purpose of this proposal? what are the follow-up measures to be taken in the next step? What puzzles me even more is that, at this moment, if we cannot prevent a Member’s government from forcing foreign companies to sell their equities and technology to its national companies in any way, how can we sit here comfortably and discuss and tell the world what the market orientated conditions are?

Mr. Chairman, we need to bear in mind that for more than three years, we have failed to take effective actions to stop unilateralist and protectionist measures that undermine the market rules from raging around the world, and this organization we work for has been widely criticized for falling short of such actions. We should feel ashamed. However, at least, we could still argue that it is not because we do not want to, but because we are not capable enough. But now, why should we talk empty about the market-oriented conditions to give more reasons for the international community to laugh at us, for being not only incapable, but also naive?

When a principle or a system is broken, what we should do is to take concrete actions to try to fix it rather than verbally repeating the importance and correctness of the rules to show the innocence of someone who broke the rules.

Ambassador Shea once said that “when the state puts its thumb – or even its fist – on the scale to distort competition and drive preferred outcomes to benefit certain domestic actors, that is unfair.” I couldn’t agree with him more about that. But it is a common sense that if you ask others to do something, you should do it first.

Let me give you some specific examples. When a country, on the grounds of national security, arbitrarily and frequently imposes tariffs on foreign goods or deprives foreign services of market access, that is unfair. When a country uses tariffs as a leverage to force its trading partners to concede in trade negotiations, the market is distorted. When a country blatantly violates fundamental trade rules and at the same time blocks the independent and neutral adjudications, the level playing field is gone. Instead of chanting the empty slogan of “market-oriented conditions”, it’s better for us to take concrete actions to address the above wrongful practices which undermine the fair competition and market-oriented conditions.

Thank you, Mr. Chairman.