China and the Long March to Global Trade: The Accession of China to the World Trade Organization

By Sylvia Ostry; Alan S. Alexandroff et al. | Go to book overview

8

Article X and the concept of transparency in the GATT/WTO

Sylvia Ostry

Introduction

I have often (only partly in jest) described the word transparency as the most opaque in the trade policy lexicon. This is because while it is considered one of the basic rules governing the postwar trading system as embodied in the GATT and now the WTO, its genesis is obscure, its definition - captured in Article X of the 1947 GATT (see Appendix) - imprecise, and the extent and nature of its implementation pretty well unknown.

The use of the word transparency, however, has become so widespread that it has reached an exalted status - as argued in a column by William Safire of the New York Times (January 4, 1998). Its use now goes well beyond trade circles: as Safire notes, it is key to the “diplolingo” of arms control; it became the buzzword of the Asian financial crisis; and is an icon of civil society through Transparency International, an NGO created to expose and destroy bribery and corruption.

It is important to assure the reader that the title of this chapter was not derived from Safire's annointment of the term. The reason was that, however imprecise the GATT/WTO definition of transparency, the core of that definition goes to the heart of a country's legal infrastructure, more precisely the nature and enforcement of its administrative law regime. And the current nature of China's administrative legal infrastructure will require extensive transformation before full and effective WTO integration is possible. Without such transformation, Chinese accession could be seriously damaging to the long-term viability of the WTO.

In the remainder of this chapter, I want first to review briefly the growing legalization of the trading system which makes the WTO, especially in this respect, a very different institution from its predecessor, the GATT. This legalization is largely a reflection of changes in US trade policy beginning in the latter half of the 1970s. Finally I shall examine the nature of administrative law in the context of the WTO/ China accession conditions which include, inter alia, a strong emphasis on transparency.


The legalization of the trading system

The postwar architecture of international economic cooperation was largely the product of US leadership and, understandably, primarily reflected American values

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