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THE WTO CONTINGENT TRADE INSTRUMENTS AGAINST CHINA: WHAT DOES ACCESSION BRING?

Published online by Cambridge University Press:  24 April 2009

Michelle Q Zang
Michelle Q Zang
Affiliation:
PhD candidate, Law School, Durham University, UK. Contact at [email protected].
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Abstract

As part of the conditions for WTO accession, China is committed to a number of additional obligations stipulated in the accession documents. This article will mainly focus on the contingent trade instruments in this context, which WTO Members are entitled to take against products of Chinese origin. In this regard, the WTO rules to be examined include the buffering mechanism under Sections 15 and 16 of the Accession Protocol and the textile-specific safeguard mechanism under paragraph 242 of the Working Party Report. The discriminatory and non-beneficial nature of the latter makes it the most unfair component in China's accession. In some cases, these China-only instruments also go against some fundamental WTO principles. For example, revivals of grey-area measures and the bilateral approach are fairly evident therein, which are no longer advocated and even prohibited under the WTO system.

Type
Article
Information
International & Comparative Law Quarterly , Volume 58 , Issue 2 , April 2009 , pp. 321 - 351
Copyright
Copyright © 2009 British Institute of International and Comparative Law

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References

1 See http://stat.wto.org/

2 Available at http://docsonline.wto.org/DDFDocuments/t/WT/L/432.doc

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5 See the accession process of Poland, Romania and Hungary.

6 ibid.

7 It is provided that ‘in determining price comparability under Article VI of GATT 1994 and the Anti-dumping Agreement, the importing WTO Member shall use either Chinese prices or costs for the industry under investigation or a methodology that is not based on a strict comparison with domestic prices or costs in China’. See Section 15 of Accession Protocol.

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40 WTO Japan-Alcoholic—Report of the Appellate Body WT/DS8/AB/R para 114.

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42 WTO US-Lamb Meat—Report of the Panel WT/DS177/R, WT/DS/178/R para 7.109.

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50 Article 4.1 WTO Agreement on Safeguards.

51 ‘Material injury’ is the standard provided for in Article VI of the GATT 1994, Articles 5 (footnote 11) and 15 (footnote 45) of the SCM Agreement, and Article 3 (footnote 9) of the Anti-Dumping Agreement.

52 Y-Shik Lee (n 47).

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58 WTO US-Lamb—Report of the Appellate Body WT/DS178/AB/R para 170.

59 See Section 13 of Transitional Safeguards, Working Party Report.

60 Article 3.2 SGA.

61 Article 8 SGA.

62 S Andersen and C Lau (n 37).

63 See Para 246(f) of the Working Party Report.

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74 Article 4.2(b) SGA provides that ‘when factors other than increased imports are causing injury to the domestic industry at the same time, such injury shall not be attributed to increased imports’.

75 WTO US-Cotton Yarn—Report of the Appellate Body WT/DS192/AB/R; Argentina-Footwear (EC)—Report of the Panel WT/DS121/R; Argentina—Footwear (EC)—Report of the Appellate Body WT/DS121/AB/R; US-Wheat Gluten—Report of the Appellate Body WT/DS166/AB/R; US-Lamb—Report of the Appellate Body WT/DS177/AB/R, WT/DS178/AB/R; US-Lamb—Report of the Appellate Body paras 179–180.

76 It is required under this principle that Members must comply with all the WTO rules at all times unless there is a formal ‘conflict’ between them. Detailed analysis on this issue is included in the previous part.

77 para 248 of the Working Party Report.

78 ibid para 247.

79 Para 242 (c): upon receipt of the request for consultations, China agrees to hold its shipments to the requesting Member of textile or textile products in the category or categories subject to these consultations to a level no greater than 7.5 per cent (6 per cent for wool product categories) above the amount entered during the first 12 months of the most recent 14 months preceding the month in which the request for consultations was made.

80 Article XIX (2) of the GATT.

81 The Working Party Report, available at http://docsonline.wto.org/DDFDocuments/t/WT/min01/3.doc

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84 D Huang (n 82).

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86 Article XIX:1 GATT.

87 WTO Argentina-Footwear—Report of the Appellate Body WT/DS121/AB/R para 91. See also Korea-Dairy—Report of the Appellate Body WT/DS98/AB/R para 84.

88 The Appellate Body rejected the conclusion of the Panel that ‘safeguard investigations conducted and safeguard measures imposed after the entry into force of the WTO agreements which meet the requirements of the new Safeguards Agreement satisfy the requirements of Article XIX of GATT’. This is because, according to the Appellate Body, the foregoing conclusion is inconsistent with the principles of effective treaty interpretation and with the ordinary meaning of Articles 1 and 11.1(a) of the Agreement on Safeguards. WTO Argentina—Footwear (EC)—Report of the Panel WT/DS121/R para 8.69. Argentina—Footwear (EC)—Report of the Appellate Body WT/DS121/AB/R para 89.

89 Detailed discussions are included in the previous part.

90 S Andersen and C Lau (n 37).

91 See Section 16.2 of the Accession Protocol and Para 242(a) (b) of the Working Party Report.

92 See Article XI GATT.

93 Y-Shik Lee (n 47).

94 Jones, K, ‘The safeguard mess revisited: the fundamental problem’ World Trade Review (2004), 3: 1, 83–91CrossRefGoogle Scholar. Sykes, Alan O., ‘The Safeguard mess: a critique of WTO jurisprudence’ (2003) World Trade Review (2003), 2: 3, 261–295.CrossRefGoogle Scholar

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96 Y-Shik Lee (n 47).

97 In particular, the US and China concluded a memorandum of agreement on import-level restraints on 21 categories of textiles and clothing products from China in Nov 2007; and the EU and China signed a similar pact in June 2005.

98 H Liu and L Sun (n 38).

99 ibid 66.

100 ibid 69. Further discussions of bilateralism will be included in the final part of this article.

101 J Kerier, ‘Contingent trade remedies and WTO Dispute Settlement: some particularities’, in Key issues in WTO dispute settlement: the first ten years (Cambridge University Press, Cambridge, 2005) 46–62.

102 CP Bown (n 66).

103 ibid.

104 ibid.

105 Available at http://docsonline.wto.org/GEN_searchResult.asp

106 Available at http://www.wto.org/english/tratop_e/adp_e/adp_e.htm

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112 Article 17.6 ADA provides: ‘If the establishment of the facts was proper and the evaluation was unbiased and objective, even though the panel might have reached a different conclusion, the evaluation shall not be overturned’. It is further provided that ‘where the panel finds that a relevant provision of the Agreement admits of more than one permissible interpretation, the panel shall find the authorities’ measure to be in conformity with the Agreement if it rests upon one of those permissible interpretations.'

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115 A Polouektov (n 7).

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117 Analysis on the ATC implementation, see James Scott, ‘The use and misuse of trade negotiation simulations’ (2008) Journal of World Trade 42(1): 87–103, J Mayer, ‘Not Totally Naked: Textiles and Clothing Trade in a Quota-free Environment’ (2005) Journal of World Trade (2005) 39(3) 398; HK Nordås ‘The Global Textile and Clothing Industry post the Agreement on Textiles and Clothing’, Discussion Paper No 5, World Trade Organization, Geneva, Switzerland, 14.

118 According to Para 242, the textile-specific safeguard will terminate at the end of 2008.

119 Analysis for the reasons are analysed in Part IV.

120 Data available at http://www.wto.org/english/tratop_e/adp_e/adp_e.htm http://www.wto.org/english/tratop_e/safeg_e/safeg_e.htm

121 ibid.

122 Section 15(d) provides that ‘in any event, the provisions of subparagraph (a)(ii) shall expire 15 years after the date of accession’.

123 Section 16.9 provides that ‘Application of this Section shall be terminated 12 years after the date of accession’.

124 In fact, when the EC decided to impose definitive safeguard measures against imports of citrus fruits from China in 2004, the standard WTO rules, rather than those under Section 16, have been followed. Commission Regulation 658/2004 of 7 April 2004 imposing definitive safeguard measures against imports of certain prepared or preserved citrus fruits, OJ L 104, 8.4.2004, 67–94.