SCIO press conference on WTO's eighth trade policy review of China

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Xing Huina:

We will have one last question.


During the WTO's eighth trade policy review of China, members of the organization spoke highly of China's commitment to safeguarding the multilateral trading system and supporting the WTO so that it could play a bigger part. What's China's stand on proactively participating in reform of the WTO in the future? Thank you.

Wang Shouwen:

Thank you for your question. As I've mentioned, China attaches great importance to enhancing the authority and efficacy of the WTO and has paid great attention to its reform. President Xi Jinping noted that China supports necessary reform of the WTO; that the reform should seek to keep up with the times so that the WTO can better facilitate market opening-up and promote growth; and that the reform should be conducive to safeguarding free trade and multilateralism and narrowing development gaps. This is China's fundamental stand on the reform of the WTO.

In terms of specific fields of the reform, I'd like to expound on the following aspects. First, regarding the agenda of the reform, we believe that the WTO should not only address conventional and unresolved issues left from the past but also develop outlines for emerging issues and update the relevant rules in keeping with modern society. For example, issues concerning the agriculture sector are one of the important conventional topics. We believe that there are highly unfair rules on agriculture and that relevant subsidies have severely distorted international trade in the sector. Some developed member states of the WTO have received a huge amount of aggregate measurement of support (AMS), which requires more attention from the media. For example, for some countries, the AMS on sugar accounts for more than 65% of its price, and the AMS on cotton is 2.8 times the value of the output of cotton. It is unreasonable that developed countries are entitled to such a huge volume of subsidies.

However, developing member states of the WTO can only subsidize up to 10% of the product output value. There is a special term called "de minimis," which stipulates that subsidies provided to developing countries can only account for up to 10% of the product output value. The 10% subsidy has very little impact on trade. Yet, it is of paramount importance and indispensable to the supply of agricultural products as well as the security of agricultural industry and food. It is especially crucial for the small-scale agricultural economy and farmers' livelihoods. Therefore, China advocates canceling the huge amount of AMS, which severely distorts international trade, while maintaining the small number of subsidies that are necessarily needed for the small-scale agricultural economy, so as to protect agriculture and food security.

In addition, the public and safe reserve of food is also a conventional issue, and we need to come to an agreement on this through negotiation as soon as possible. In the meantime, we think that some emerging issues should also be considered, such as e-commerce, investment facilitation, as well as fisheries subsidies just mentioned by a journalist. We should reach agreements on these issues as soon as possible.

Second, dispute settlement is one of three important functions of the WTO. The dispute settlement mechanism is very important, and it can help safeguard the norms of global trade. If a country thinks that another country is doing something wrong, then it can file a lawsuit. If the latter is wrong indeed, then it will need to rectify the situation. If there is no such dispute settlement mechanism, then disputes between countries will be handled via the "law of the jungle," which means that the standard of right and wrong will be determined by those with the most strength. This is destructive to international trade. Unfortunately, due to the obstruction of some member states, the dispute settlement mechanism of WTO is facing a crisis, and its Appellate Body hasn't been functioning. We believe that WTO reforms should address issues related to its Appellate Body as soon as possible. China has placed great emphasis on this issue and has been advocating to restore the normal operation of WTO's Appellate Body. Given the current problems facing the Appellate Body, China, the European Union, and other WTO member states have agreed to a multi-party interim appeal arbitration arrangement. Of course, this arrangement would only be temporary. We hope that trade disputes could be settled through the two tiers trial methods of these third parties rather than through economic bullying.

The third aspect is about the methods that WTO can take to carry out reform. For conventional issues and those concerning the majority of member states, we uphold the principles of consensus to carry out reforms. For emerging issues such as e-commerce, we think that the principles of consensus cannot be accepted by every WTO member for now. We hold an open attitude and propose issuing joint statements. This means that a group of member states can first reach plurilateral agreements to address specific issues in these fields, and the rest of the members can join in once all conditions are favorable in the future. 

In general, China has placed great emphasis on the reform of the WTO, and we are willing to participate in the course in a fairly proactive and constructive way so to enhance the WTO's authority and efficacy and contribute to global economic growth, especially the liberalization and facilitation of global trade and investment. Thank you.

Xing Huina:

Thank you to all speakers and friends from the media. Today's briefing is hereby concluded. Goodbye.

Translated and edited by Wang Qian, Duan Yaying, Xu Xiaoxuan, Yuan Fang, Cui Can, Wang Yanfang, Yang Xi, Li Huiru, Yan Xiaoqing, Huang Shan, Xiang Bin, Liu Qiang, Dong Qingpei, Zhang Rui, Zhang Tingting, Zhang Junmian, Zhu Bochen, Wang Yiming, David Ball, Drew Pittock, Jay Birbeck, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.

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