Academic journal article China Perspectives

China and the WTO Dispute Settlement System: The Global Trade Lawyer and the State Capitalist

Academic journal article China Perspectives

China and the WTO Dispute Settlement System: The Global Trade Lawyer and the State Capitalist

Article excerpt

Since its accession to the WTO on 11 December 2001, China has been involved in eight cases as complainant, 23 as respondent, and 89 as a third party.!1'

Against all pre-entry predictions, the China related cases have not over-burdened the WTO dispute settlement system, as if all parties were implicitly respecting a latent period before engaging in commercial hostilities. Often portrayed as a "passive rule taker" (2> in the immediate aftermath of its accession, China was not only learning by attentively watching other members' strategies, but was also benefiting from the benevolent attitude of its main trading partners, the US and the EU. Moreover, its participation in 89 WTO disputes as third party is not a trivial detail, <3> nor is it a sign of passivity, but rather one of cautious preparation that corresponded to the time needed to properly apprehend its new legal tools and all rights there under.This strategic learning was rapidly evidenced by the novel official discourse on rights and obligations the Chinese leaders developed as a powerful tactical instrument. As early as January 2003, at the Dispute Settlement Body's special session, the Chinese delegation to the WTO presented a "communication"!4) aimed at the improvement of the "special and differential" provisions contained in the Dispute Settlement Understanding (DSU), the WTO rules governing the settlement of disputes. An ambiguous emerging super power, China was playing the developing country's card!5) in requesting a genuine special and differential (S&D) treatment to be introduced in the DSU as it is in many other WTO legal instruments.(6) Recalling its commitment to engage in WTO activities and "play a positive role in the formulation of multilateral trade rules, including rules concerning dispute settlement mechanism," *7> China proposed the reinforcement of the S&D treatment for developing countries and precisely the following key reforms:

(a) Developed-country Members shall exercise due restraint in cases against developing-country Members. For instance, developed-country Members shall not bring more than two cases to the WTO Dispute Settlement Body against a particular developing-country Member within a calendar year.

(b) Where a developed-country Member brings a case against a developing-country Member, if the final rulings of a panel or the Appellate Body show that a developing-country Member does not violate its obligations under the WTO Agreements, the legal costs of the developingcountry Member shall be borne by the developed-country Member initiating the dispute settlement proceedings.

(c) Developed-country Members shall help developing-country Members participate in the dispute settlement mechanism in a more effective way through providing technical assistance and capacity building programmes.(8)

As a Recently Acceded Member (RAM) and diligent student in international trade, China was testing other members' readiness to interpret its Protocol of Accession *9> and bring disputes as well as the available strategies to influence the flow and pace of these potential cases. An active learner and rules negotiator during the first seven years of its participation, Beijing progressively matured into a more offensive player while it brought 6 new cases as complainant between 2008 and today.

Chicken, tires, paper, steel, distribution rights, intellectual property, or solar panel, the China related disputes cover all possible areas of international trade*10* and directly address the interpretation of China's unique Protocol of accession. But one also finds rapidly that the vast majority of cases - and cases to come - deal with anti-dumping measures adopted in reaction to what is often perceived, in Europe and the US, but also increasingly in the developing world, as unfairtrade.

There are many ways of approaching an already vast body of decisions and related legal and economic literature.To better reflect the uniqueness of the Chinese trade regime and the impact of such a peculiar mix between economic liberalisation and maintenance of the state on other WTO members, I have chosen to focus on three singular aspects now emerging from the settled disputes: the transitional product specific safeguard measures adopted in reaction to a market disruption caused by Chinese imports, the antidumping and countervailing duties issue, and the restrictions on exports or imports imposed by China for economic, but also societal and political reasons. …

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