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China’s and the WTO: Unfinished Business

China’s tortuous road toward membership in the World Trade Organization (WTO) is winding toward its end. Before China joins, however, the final terms on which it enters the WTO must be negotiated with a group of WTO members acting on behalf of the organization and expressed in a formal agreement, the Protocol of Accession. Big legal issues that have been put to the side must now be tackled.

When China joins the WTO, it will become committed (like all other members) to policies and practices that have been agreed on by the international community of trading nations and are expressed in the General Agreements on Tariffs and Trade (GATT) and other multilateral treaties. China’s lengthy negotiations with the US and the European Union over WTO membership largely focused on vexatious economic issues, such as lowering tariffs, ending quotas on exports to China, opening its market to key imports where access has hitherto been excluded or limited, and permitting foreign investment in industries such as telecommunications.

Those bilateral negotiations will benefit other members of the WTO as well, because membership in the WTO obligates China to treat all other members equally. Too little attention has been paid, however, to other matters that will also affect all WTO members, namely the measures that China must take to raise its level of legality to meet standards set down in the GATT.

A draft of the Protocol of Accession – under negotiation for years but not yet final – contains provisions that could change Chinese law and accelerate the construction of a legal system, a process that only began twenty years ago when Deng Xiaoping launched China’s economic reforms. China has already agreed to move toward meeting relevant WTO standards, such as Article X of the GATT, which obligates members to apply trade laws in a “uniform, fair and reasonable manner.”