|
||
|
TWN
Info Service on WTO and Trade Issues (Aug26/03) Geneva, 31 Jul (D. Ravi Kanth) -- Without directly naming the United States or other members of the Group of Seven (G7) industrialized countries, China used a World Trade Organization discussion on level playing field (LPF) issues on 29 July to assert that “unilateralism and fragmentation cannot be the solution” and that “the challenges relating to a level playing field are best address(ed) through improved global trade governance.” The remarks came amid a persistent rift between a large majority of developing and least developed countries on one side, and the key proponents of WTO reform - the US, the European Union, Japan, and the so-called “Friends of the System” group - on the other. In that divided context, China’s deputy trade envoy to the WTO, Yingzhi Hu, informed members that “the issues [referring to LPF issues] at stake often lie at the intersection of legitimate domestic policy objectives and international trade obligations.” DIVIDED AGENDA Ironically, several trade envoys who spoke on the condition of anonymity pointed out that Washington has simultaneously unleashed a wave of unilateral trade measures - including Section 301 actions targeting 60 countries - while pushing for what they described as divisive reforms on the membership. These Section 301 measures would likely have been overturned by the WTO’s Appellate Body had it not been rendered inoperative by the US in December 2019, a former WTO trade official and now international trade law professor Petros C. Mavroidis, told the SUNS. Adding to the friction, the US and its reform allies are showing little appetite for ongoing discussions on dispute settlement system (DSS) reform, according to trade envoys. By insisting that “now is not the time” to address DSS reform, these powerful countries seem to be effectively ensuring that the current dysfunctional system remains paralysed. COUNTER-NARRATIVE Against this backdrop, the statement by China’s deputy trade envoy highlighted several core challenges in the LPF debate. China noted that since circulating its last WTO reform proposal (WT/GC/W/989) in February, “discussions among Members have progressed, and we have carefully considered the perspectives put forward by other Members in their submissions.” Building on that, China said that it “would like to offer some further reflections on how this discussion can most constructively contribute to WTO reform.” According to Beijing, “the WTO already provides the essential institutional foundation for promoting a level playing field, including through non-discrimination, transparency, and the binding dispute settlement system.” Reaffirming its position on “the foundational issues track,” China stressed that “the objectives of WTO reform, including the pursuit of a level playing field, cannot be achieved by weakening the WTO or eroding its core principles, including the most-favoured-nation principle.” In their proposals, the US, the EU, and some other powerful countries seem determined to do away with MFN treatment, which is at the heart of the non-discrimination principle enshrined in Article I of the GATT (1994). “On the contrary,” China cautioned, “doing so [undermining the MFN principle] would risk replacing a rules- based system with a power-based one, where the playing field is shaped by the few rather than level for all.” Therefore, China argued that it “supports strengthening the WTO through the necessary reforms to address the genuine challenges to achieving a level playing field.” While acknowledging that “Members may hold different understandings of what constitutes a “level playing field”,” China said such differences “should be addressed through constructive dialogue, mutual understanding, and policy coordination.” However, Beijing warned that “in practice, such differences are increasingly being invoked to justify unilateral and discriminatory measures, exclusionary trade arrangements, and competitive subsidy races, all of which have become among the greatest threats to a level playing field and disproportionately harm the legitimate interests of developing Members.” The senior Chinese official firmly maintained that “only multilateral engagement and cooperation can provide the legitimacy, inclusiveness, predictability, and broad acceptance required for balanced and durable solutions, and enable Members to draw on a broader range of policy tools.” ELEMENTS FOR REFORM To advance the LPF discussions, China put forward three concrete elements for members’ consideration: 1. Identifying the appropriate object of governance: China argued that “the focus should be on government measures that may distort international trade, including industrial subsidies.” While such measures, “when well-designed and implemented, can address market failures, narrow development gaps, promote industrialization, and contribute to tackling global challenges,” they can also “distort trade, disrupt supply chains and waste public resources” when misused. Thus, it said “WTO reform should therefore aim at containing their negative effects without compromising their benefits by recognizing their double-edged nature.” Crucially, China insisted that reform “must not infringe upon Members’ sovereign right to establish and maintain state-owned enterprises by characterizing their existence as inherently trade-distorting government intervention and prescribing privatization as the sole solution,” nor should it “constrain the legitimate policy space that developing Members require for industrialization and sustainable development.” 2. Steering toward a more effective governance approach: China cautioned that “in today's deeply integrated global economy, there is no simple or one-size-fits-all solution for promoting the level playing field.” It stressed that “effective governance therefore requires a comprehensive and balanced toolkit,” including updating subsidy rules, improving transparency, strengthening oversight, and promoting dialogue. Beijing further stated that it “firmly believes that when it comes to trade distortions, prevention is better than re-mediation,” urging members to focus on upstream policy design. It also warned that “the misuse of trade remedies has itself become a source of concern,” and that “extra caution should therefore be exercised, and effective safeguards against abuse should accompany their use as governance tools.” 3. Keeping discussions open, inclusive, and member-driven: China insisted that the LPF track “cannot be defined through one-sided narratives, nor measured simply by market shares or trade balances.” It stressed that “discussions should neither be selective nor driven by predetermined outcomes,” but instead “seek to build mutual understanding, trust, and convergence among Members.” To achieve meaningful progress, China said, “discussions should remain focused on concrete measures and practical governance challenges rather than politically constructed labels or vague concepts.” Furthermore, Beijing insisted that “external datasets, studies, outcomes or Member-specific practices and commitments should not serve as benchmarks or reference points for our discussions.” PROCESS & PROGNOSIS China concluded by stating that it “attaches great importance to the work of [this] track and looks forward to continuing to engage constructively in discussions,” while reserving “the right to submit further communications to elaborate its views as discussions progress.” A transparency session scheduled for 30 July has been cancelled, with the Secretariat working through substantive discussions on four key issues. Although the facilitators have promised to issue reports on their meetings, they are under scrutiny to ensure that those reports are balanced and accurately reflect all positions without bias - a challenge that has plagued previous summaries, according to people familiar with the development. Absent a shift in tactics, and with some powerful countries allegedly applying coercive pressure behind the scenes, including director-general(s) - as seen in past negotiations - the prospects for meaningful WTO reform remain precarious, these sources said.
|
||
