A year after China joined the WTO, Lee Boam's business is booming. He wishes it weren't: Boam, commercial counselor at the US Embassy in Beijing, has US$4 billion in trade disputes on his desk.
At least one-quarter of those stem from complaints that China isn't keeping promises made when it joined the rule-setting body for global trade.
Foreign businesses say China is making progress overall in admitting outsiders -- lifting import restrictions, cutting tariffs and red tape and bringing its legal system into line with world standards.
But everyone from banks to lipstick-makers complains it hasn't moved as fast as promised -- and in some cases is imposing new barriers to foreign competitors.
Echoing complaints by other trading partners, a report by the American Chamber of Commerce in China cited numerous allegations of unfair trade practices.
It accuses Beijing of imposing unusually strict technical standards on cars, medical equipment and mobile telephones. According to the report, released this fall, regulators have failed to tell importers of farm products to whom they may sell and sometimes requires them -- in violation of WTO pledges -- to identify who will buy finished goods made with their products.
Yet, disgruntled foreign firms seem reluctant to resort to the WTO for "dispute settlement," afraid of official retaliation and preferring the anonymity of filing joint complaints through embassies or chambers of commerce.
"We want to do business in China," said Sara Yang Bosco, a partner at the Perkins Coie law firm's Hong Kong office. But, she said, "you have to make a very strategic decision about where you make your enemies and where you make your friends."
In the past year, the Chinese government has tightened restrictions on foreign lawyers working in China. They may not advise clients on Chinese law in arbitration proceedings or handle routine applications and other dealings with government agencies.
Such limits seem "to violate both the letter and the spirit of the WTO accord," Bosco said during a recent conference in Hong Kong. "It's not been a great year for international law firms."
Importers complain of "vicious compliance" by Chinese regulators who they say keep out foreign competitors by enforcing rules more aggressively than required.
Authorities have enforced new sanitary standards and set new limits on genetically modified crops. A lipstick-maker was required to obtain separate import approval for each color of each of its brands.
China declared a zero-tolerance policy for salmonella, listeria and other bacteria in imported raw meat and poultry. It began holding up US meat imports, though it had not set a similar policy for its own meat producers.
Another problem area: Beijing's promise to open its markets for services such as telecommunications, banking, insurance, shipping and professional services such as law and accounting.
Foreign banks are promised treatment equal to their Chinese competitors -- but only after China has been in the WTO for five years. Until then, regulators are restricting licenses and requiring each foreign bank branch to have up to US$72 million in capital.
"Banks still face a lot of barriers on who we can do business with, what we can offer and when we can do it," said T.C. Chan, country corporate officer for Citibank.
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