WASHINGTON DC – U.S. Trade Representative Susan C. Schwab today presented to Congress a statutorily mandated annual report on China’s compliance with its World Trade Organization obligations. The report describes broad progress made to date by China in implementing reforms, but also highlights the need for additional action in important areas such as intellectual property rights enforcement and the elimination of government policies that hinder market access for U.S.
“The United States and China have both benefited greatly from our growing trade relationship, and China’s participation in the rules-based international trading system has aided China greatly as it transforms itself into a modern commercial power. China has taken many important steps to implement its WTO obligations, but on the fifth anniversary of its WTO membership, China’s overall record is decidedly mixed,” said Ambassador Schwab. “Chinese reforms have lowered systemic trade barriers to many goods and services from the United States and other WTO members and have begun to strengthen the rule of law in economic matters. At the same time, certain industries face frustrating barriers to doing business in China, and there are worrisome signs that China’s market liberalization efforts have slowed in the last year. With five years of WTO membership experience under its belt, we believe it is fair to expect China to be implementing the letter and spirit of its WTO obligations in full. This would benefit both of our countries and strengthen the global trading system.”
Since China entered the World Trade Organization on December 11, 2001, exports of U.S. goods to China have grown by 190 percent and China has gone from being the United States’ fifteenth to fourth largest export market.
At the same time, today’s report to Congress highlights a number of areas of concern about the level of China’s implementation of its WTO commitments in areas such as intellectual property rights, industrial policies, trading rights, services, transparency, and agriculture.
In 2007, the report notes, the Administration will continue to seek improvements in these areas on two tracks. The Administration will continue to work cooperatively and pragmatically with China on WTO implementation issues in bilateral forums such as the Joint Commission on Commerce and Trade (JCCT). The Administration also will work on strengthening commitment to the WTO’s underlying economic principles through the newly created Strategic Economic Dialogue. When these efforts do not achieve desired results, however, the Administration will not hesitate to use the range of tools available, including WTO dispute settlement procedures and the application of U.S. trade laws, to ensure China’s compliance with international trade commitments and norms.
Background
The U.S.-China Relations Act of 2000 (P.L. 106-286), 22 U.S.C. § 6951 (the Act), requires the United States Trade Representative (USTR) to report annually to Congress on compliance by China with commitments made in connection with its accession to the WTO, including both multilateral commitments and any bilateral commitments made to the United States.
The report aims to provide as complete a picture of China’s WTO compliance as possible, subject to the inherent constraints presented by the sheer volume and complexity of the required changes to China’s trade regime and transparency obstacles.
The report is complied by USTR staff using input from several U.S. government agencies and private sector stakeholders. USTR chairs the Trade Policy Staff Committee (TPSC) Subcommittee on China WTO Compliance, an inter-agency body devoted to monitoring the extent to which China is complying with its WTO commitments.
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