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TWN
Info Service on WTO and Trade Issues (Sep25/19) Geneva, 25 Sep (D. Ravi Kanth) — China on 24 September announced that it will not avail itself of special and differential treatment (S&DT) based on the self-designation criterion in current and future trade negotiations at the World Trade Organization (WTO), while insisting that it will retain its developing country status. It emphasized that the S&DT provisions in its accession protocol will remain unchanged, adding that the latest decision applies only to current and future trade negotiations. On 23 September, Chinese Premier Li Qiang said, “as a responsible major developing country, China will not seek new special and differential treatment in current and future negotiations at the WTO.” At a time when few negotiations are taking place at the WTO, China’s decision may not hold much significance, said several negotiators, who requested anonymity. However, the Chinese announcement appears timed to coincide with the ongoing WTO reform discussions, negotiators said, preferring not to be quoted. In the reform discussions, a group of industrialized countries, particularly the so-called “Friends of the System” group, is pushing for “differentiation” among developing countries for availing of S&DT as a major demand, alongside undermining the practice of consensus-based decision-making. The announcement also comes amid China’s ongoing bilateral trade negotiations with the Trump administration, which during its first term insisted that developing countries forego their S&DT rights. In a 39-page communication (WT/GC/W/765/Rev.2) issued in March 2019, China, India, South Africa, Venezuela, Laos, Bolivia, Kenya, Cuba, the Central African Republic, and Pakistan had vehemently opposed the US demand on “differentiation”. They argued that it ignores the development divide between industrialized countries on one hand and developing countries on the other. CHINA CLARIFIES ON S&DT Premier Li delivered his remarks at a high-level meeting on the Global Development Initiative held by China on the sidelines of the general debate at the 80th session of the United Nations General Assembly (UNGA) in New York. At the UNGA meeting, Premier Li said, “This is a political announcement from the Chinese side that is very relevant to the WTO, especially against the current challenging global situation.” “It represents a concrete measure taken by China to proactively assume responsibility and demonstrate the commitment of a major developing country,” he said, underscoring “China’s firm stance in supporting the multilateral trading system through concrete actions.” He said that China’s decision “will inject positive energy into advancing WTO current discussions, especially the reform of the global economic governance system.” He made it clear that the decision on S&DT “does not involve any change to China’s status as a developing country, whether within the WTO framework or in any other context.” He said that “China has always been a member of the Global South and will always be a part of the developing world.” Insisting that the decision on S&DT “relates solely to China’s decision to forgo certain Special and Differential Treatment (SDT) under the WTO framework,” he said that it “has no implication and does not prejudice China’s rights in other international fora.” Premier Li clarified that the decision “pertains only to China not seeking new SDT provisions in current and future WTO negotiations, and does not affect the rights China [has] under the SDT provisions of existing WTO agreements.” China also informed other countries that “it is a decision made by China with respect to itself. With respect to other developing countries, China will continue to stand with and speak for them, and firmly uphold their legitimate rights and interests, including their right to ask for SDT.” CHINA’S PAPER On 24 September, China circulated an unrestricted document (WT/GC/274), titled “China’s Position Paper Regarding Special and Differential Treatment in the WTO”, ahead of the upcoming WTO’s General Council meeting on 6-7 October. In its document, China provided a thorough account of why it “is entitled to the inherent institutional right to S&DT in the WTO.” Citing the preamble of the Marrakesh Agreement Establishing the World Trade Organization, China said that: “Members have recognized that “there is need for positive efforts designed to ensure that developing countries, and especially the least developed among them, secure a share in the growth in international trade commensurate with the needs of their economic development”.” Since the Tokyo Round of trade negotiations in the late 1980s, S&DT has assumed treaty status once the parties to the General Agreement on Tariffs and Trade (GATT) agreed to the Enabling Clause that listed the S&DT rights. In its position paper, China said, “Members reached consensus through negotiations that special and differential treatment is a cornerstone principle of the WTO, an integral part of the WTO agreements and an institutional right of developing members.” Beijing cautioned that attempts “to deprive developing members of special and differential treatment” will erode the rules-based multilateral trading system. China argued that it is “the largest developing country in the world,” adding that it “acceded to the WTO as a developing member and is entitled to the institutional right to special and differential treatment.” Despite giving up its S&DT rights, China assured that it “always stands with other developing members in the WTO to firmly safeguard the justice and inclusiveness of the multilateral trading system.” China said that “when acceding to the WTO in accordance with Article 12 of the Marrakesh Agreement Establishing the World Trade Organization, China enjoyed less special and differential treatment than many other developing members.” For example, China accepted an 8.5% de minimis in subsidy reductions as against 10% for other developing countries. “Since its accession, with a view to safeguarding the multilateral trading system and the interests of all members, China has been actively undertaking obligations commensurate with its own development stage and economic level, and taking the initiative to make positive contributions within its capacity to advance WTO negotiations and promote global trade and investment liberalization and facilitation,” said China. It reiterated that “in WTO negotiations,” China is committed to approaching its special and differential treatment in an independent and pragmatic manner: 1. In the negotiations and implementation of the Agreement on Trade Facilitation, China did not request any provisions under Category C, and its provisions committed under Category A account for 94% of total provisions, with only four provisions under Category B, which were implemented well ahead of schedule. 2. In the negotiations on Services Domestic Regulation and waiver of intellectual property rights of COVID-19 vaccines, China did not claim special and differential treatment and made significant contributions to the conclusion of those negotiations. 3. China announced that it would not seek to use the special and differential treatment requested by G90 in their proposal and would continue to support the negotiations on the basis of that proposal. 4. In the second phase of fisheries subsidies negotiations, China has declared that it will not seek special and differential treatment in the final package of disciplines if its core concerns are properly addressed. Significantly, China said “by not seeking new special and differential treatment,” it “has further demonstrated its steadfast commitment to the multilateral trading system.” Without mentioning the allegedly unilateral reciprocal tariffs imposed by the Trump administration, which have upended the multilateral trading system, including most-favored nation (MFN) treatment, China said, “the recent surge in protectionism and unilateralism, in particular the arbitrary imposition of tariffs by a certain member, has posed unprecedented challenges to the rules-based multilateral trading system.” China said, “the authority and efficacy of WTO rules are severely tested, and the interests of the vast number of developing members are seriously undermined.” “As a responsible major developing country and a staunch supporter of the multilateral trading system,” China said its “decision represents a solemn commitment as well as concrete action by China to safeguard the rules- based multilateral trading system with the WTO at its core.” Further, Beijing stated that “this decision will help deliver development-oriented outcomes for the 14th WTO Ministerial Conference to be held in Cameroon in March 2026 and contribute to substantial progress in WTO reform.” In addition, China said “it will also contribute to the better implementation of the Global Development Initiative and the achievement of the UN Sustainable Development Goals.” Sadly, in his address at the UNGA on 23 September, US President Donald Trump slammed the UN and characterized the Paris Agreement on climate change as a “con job.” In its paper, China clarified that its “decision does not affect China’s status as a developing member in the WTO, nor its rights to special and differential treatment provisions in existing WTO agreements, including agreed solutions with other members in current negotiations.” “This decision is applicable solely within the framework of the WTO and does not constitute any precedent or have any impact on the status and treatment of China as a developing country in any other international organization or international treaty to which China is a member or signatory.” China reaffirmed that it “has always been a member of the Global South and will always be a part of the developing world.” China said that it will, as always, practice “true multilateralism, support the rules-based multilateral trading system, actively participate in the WTO reform process, and firmly safeguard the legitimate rights and interests of developing members, with a view to better bridging the North-South development gap, improving global economic governance and building an open world economy.” +
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