On the Complexities of China's WTO Accession

Abstract

What are the reasons for and significance of not including China in the WTO? After recalling why the world has a WTO and what membership involves, this paper then examines why China wishes to join and the stumbling blocks that have caused the delay in China’s WTO accession. A summary of some recent empirical estimates of the likely orders of magnitude of the economic effects of its accession, both to China and to the rest of the world, highlight the folly of delaying membership. The stumbling blocks concern whether China should be granted developing country status in the WTO, whether China would be a ‘fair’ competitor given the dominance of state-owned enterprises in that economy still, what the extent and conditions of market access into China would be, and whether China can deliver on its promise of stricter enforcement of intellectual property rights. Actions needed by China for getting over those stumbling blocks include building a stronger and broader domestic consensus based on the net benefits from WTO membership, providing greater trade policy transparency and market access, and working towards a compromise on the issue of China’s developing country status in the WTO.