The WTO Contingent Trade Instruments Against China: What Does the Accession Bring?

Abstract

On December 11, 2001, China completed its accession process to the WTO and became a WTO Member. As part of the conditions for the WTO accession, China is committed to a number additional obligations stipulated in the accession documents. One plausible explanation for the inclusion of these obligations is nowadays China is considered as one of the most influential participants in the world trade, which is still going through the reform process towards a market economy. With regard to China's export trade, the so-called WTO-minus disciplines and rights, which refer to special rules of conduct weakening the existing WTO disciplines and reducing the rights of China as a WTO Member, are of remarkable significance. Discussions in this paper will mainly focus on the contingent trade instruments under this context, which WTO Members are entitled to take against products of Chinese origin. In this regard, WTO rules to be examined include the buffering mechanism under Sections 15 and 16 of the Accession Protocol and the textile-specific safeguard mechanism under Para 242 of the Working Party Report.On the one hand, Sections 15 and 16 are built on the premise that China, as the largest economy in transition, needs to be treated differently from both market economy and non-market economy Members. On the other hand, the establishment of Para 242 is entirely due to the weak competitiveness in the WTO Members. It is discriminatory and uni-benefitted in nature and thus turns out to be the most unfair deal in China's accession. In some cases, these China-only instruments also go against the fundamental WTO principles. For example, the revivals of the gray-area measures and the bilateralism approach are fairly evident therein, which are no longer advocated or even prohibited under the WTO system.