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China Criticized At WTO Trade Policy Review

by Mike Godfrey,, Washington

18 June 2012

Following substantial criticism from member countries, the fourth Trade Policy Review (TPR) of China completed by the World Trade Organization (WTO) on June 14 concluded that it should continue to reflect on how it could improve its trade policies and practices.

Firstly, it was said that the TPR had given a sense of China’s growing importance in the multilateral trading system. It was noted that domestic demand had played a substantially more important role in China's growth in recent years, which had led to some easing of macroeconomic imbalances, especially in its trading surpluses, which had been remarked on in previous reviews.

It was also added that many countries had commended China’s constructive role in the WTO in seeking ways to advance the Doha Development Agenda, assisting the accession of least developed countries (LDCs) to the WTO, offering zero tariffs for imports from 36 LDCs, and announcing that it is raising its duty-free and quota-free treatment to 97%.

However, China was encouraged to continue to build on the progress it has made by fulfilling all of the WTO's transparency requirements, including by providing full and prompt notifications of its trade and trade-related measures, with the TPR highlighting some key areas for further action or improvement.

For example, concerns were expressed about the impact of China’s increased resort to anti-dumping and countervailing measures, and about procedures such as the transparency of investigations, remedial measures proportional to the injury and the length of time some individual measures have been kept in place.

In addition, while WTO members welcomed that, in 2011, China had submitted its new notification of subsidies covering the central government’s assistance programmes for the period 2005-2008, it was noted that very little information is available on sub-central level subsidy programmes and China was urged to update its subsidy notification to cover the last three years on a comprehensive basis.

Concerns were also expressed over aspects of China’s export regime, especially restrictions, licensing, quotas, export taxes and partial value-added tax rebates, while China was encouraged to continue streamlining its customs procedures, make other trade facilitation improvements, and increase the transparency of its import licensing procedures.

With state-owned enterprises continuing to play a central role in China's economy and foreign trade, China was encouraged to take more steps to ensure a level-playing field for competition among enterprises irrespective of their ownership.

Members also appreciated that China has promulgated or amended a number of laws, regulations, and departmental rules regarding the protection of intellectual property rights (IPR) and its domestic dispute settlement. However, concerns were expressed about China's current practices regarding the protection of trademarks and technology transfers. Some views were also expressed about the need to strengthen enforcement aspects of IPR.

With regard to government procurement, China was encouraged to submit its revised offer as soon as possible in the context of acceding to the Agreement on Government Procurement, while some Members felt there is room for improvement in market access and investment conditions in such services as banking, insurance, telecommunications, legal services, logistics, and transport.

TAGS: tax | trademarks | export duty | public sector | law | tariffs | anti-dumping | World Trade Organisation (WTO) | China | enforcement | trade disputes | import duty | regulation | trade | services

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