World trade organisation should not accept china proposing debate
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Answer:
Foreign Policy In Focus has on several previous occasions produced policy briefs or reports supporting granting China permanent normal trading status and WTO membership. Neither of FPIF’s sponsoring institutions, IRC and IPS, have taken public positions on these issues, and other projects at IPS have raised questions about the terms of China’s entry into WTO. As a project, FPIF does not require that our experts adopt preordained policy positions, only that they articulate policy recommendations that are based on broad concern for global peace, sustainable development, and human rights. We recognize the controversial character of this policy brief, particularly for labor and “fair trade” advocates in the U.S., and we are including an accompanying page that briefly presents some dissenting voices. We solicit comments and critiques, which will be posted on our website.)
Key Points
WTO membership for China is the most significant advance in relations with the U.S. since diplomatic ties were established two decades ago.
Creating winners and losers on both sides, the November 15th agreement will benefit both economies, but China has conceded much more than has the United States.
WTO membership would likely incline China more toward peace and the rule of law, though progress will take time.
The November 15th U.S.-China agreement on the terms for China to join the World Trade Organization (WTO) is the most significant deal between the two countries since diplomatic relations were established more than two decades ago. The Clinton administration hopes this paves the way for Congress to now vote permanent Normal Trade Relations (NTR) (also known as Most Favored Nation), thereby giving China the same trading privileges now enjoyed without annual review by almost every other U.S. trading partner. The only other nations denied NTR status by the U.S. are: Afghanistan, Cambodia, Cuba, Laos, North Korea, and Yugoslavia. China has enjoyed NTR since 1980, but only by an annual vote of Congress. Only if the U.S. Congress approves permanent NTR for China can the November agreement be implemented. WTO membership for China and permanent NTR status will clear the way for Taiwan to join the WTO. China and Taiwan are the only two major U.S. trading partners that are not members. When these two join, all significant U.S. trading partners will be governed by the same rules and dispute-resolution procedures.
Joining the WTO will not give China any trading advantage with the U.S. that it does not already enjoy, but China anticipates that securing permanent NTR will remove the political embarrassment of Congress’ annual scrutiny of its human rights, labor, and environmental record. More importantly for the U.S., the agreement grants unprecedented access to the Chinese market for both U.S. exports and investments—including in politically sensitive sectors like banking, insurance, and telecommunications—and it will improve the chances for relations to develop peacefully on the basis of mutual interest. In seeking WTO membership for China, the U.S. government has rejected arguments by many labor, human rights, and environmental groups that this should be tied to commitments by China to improve human rights and environmental standards.
The November 15th U.S.-China agreement is a major step toward Chinese membership in the 135-member WTO. To gain approval from the existing members, China, which has been seeking GATT/WTO membership since 1986, must reach bilateral understandings with its important trading partners. Before securing Washington’s approval, China had previously made agreements on the terms for its entry into WTO with a dozen countries, including Japan and Australia. Negotiations continue for settlements with other major Chinese trading partners, most notably the European Union, but no major problems are anticipated in reaching consensus with the other WTO members. Therefore, China’s admission to the WTO sometime next year is now likely.
The November 15th agreement imposes much more substantial concessions on China than on the U.S., which merely grants permanently what it has long granted annually anyway. China’s concessions are the price of U.S. support for Chinese WTO membership. Both these concessions and the WTO rules themselves should have a profound impact on China, substantially opening its economy to foreign competition. WTO membership would compel China to change its current commercial laws and practices to conform to WTO rules. Trade disputes would be resolved through the WTO adjudication procedures rather than through bilateral bargaining. China has seemed to prefer bilateral trade bargaining in the past because, as a large country, it is often able to gain more concessions that way. Once it is a WTO member, China would need to negotiate trading terms on a multilateral basis with all members at once.